Forums - Sony Discussion - Sony rating lowered to one point above junk status by investors


Investor services firm Moody's has reclassified the ailing electronics firm to one point above junk status.

Shrinking consumer demand for electronics has resulted in the Japanese firm's long-term debt rating being lowered one notch, according to Reuters.

Moody's Investor Service now considers the firm applicable to the lowest investment grade level possible before hitting "junk status". Once a company hits this grade, otherwise known as a "BB" rating or "high-yield bond", any investment made is high-risk by default -- something which could impact the company's plans to restructure and recover. 

In October, the investment firm began downgrading Sony's status, believing the electronics maker's prospects, despite restructuring efforts, remained negative.

If Sony's rating is cut by one more point, some funds may be forced to offload debt, and the firm may find itself restricted in how much money it would be allowed to raise in credit markets. 

"Without robust restructuring in the coming 12-18 months, Sony's non-financial services businesses will at best achieve roughly break even, and are also at risk of remaining unprofitable," the rating agency said in a recent report.

Sony's Q2, ending September 30, resulted in an operating profit of $388 million, in comparison to a $20 million loss in the same quarter within FY2011. The ailing electronics maker made a loss of $5.7 billion last year and $312 million in the first quarter.  

As part of restructuring efforts implemented by CEO Kazuo Hirai, the electronics giant plans to close a number of offices within Tokyo, Japan, has created a voluntary retirement program for employees and the eventual dismissal of 10,000 workers from its global workforce.

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Guess Sony can't take out a loan anymore or else the interest alone will ruin them. They are truly on their own now.


System defining games (over 70 on metacritic) not on the other. IMO these are the system sellers that matter. No amount of PS4 selling can take this away.

2013: Forza 5, Dead Rising 3, Killer Instinct > Killzone Shadowfall

2014: Titanfall, Sunset Overdrive, Project Spark, Forza Horizon 2, Master Chief Collection > Infamous SF, Drive Club, Little Big Planet 3, Last of Us (IMO lacking in content compared to MCC).

2015: Rare Replay, Gears Ultimate, Forza Motorsport 6, Halo 5 > Bloodborne, Nathan Drake Collection, God of War 3 Remastered

This just keeps getting worse and worse.

So now is the time to buy Sony stock!

wow, again? (and already?)

My 3DS Friend code is 0877-1237-2177 ...ADD ME! :D

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spurgeonryan said:
So now is the time to buy Sony stock!

I'd say so with the upcoming holiday season and their restructuring efforts. Sony is hitting the bottom and a full recovery on their part might bring some decent returns. Though risky.

Before the PS3 everyone was nice to me :(

Nintendo can perform a hostile takeover soon, once and for all getting their revenge on Sony over the whole CD drive thing.

(yes, not serious)

Nintendo Network ID: jlrx81

Steam ID Nova Nightmare  - My 3DMark Can you beat that? Prove it!

I am serious^

As long as they do not go bankrupt it should be a low risk investment with high returns. Ofcourse I held on to Nintendo stock for almost 8 months. Still waiting.

Pretty weird. To me it looks like that Sony is pretty much the only Japanese electronic company that is turning itself around. They saw that economy crash will continue for years and strong yen is more permanent condition and started to downsize and are actually coming back to profits this fiscal year after years of huge losses. At the same time Panasonic and Sharp are losing billions because they thought that this economy crash/strong yen would go away in couple of years.

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jlrx said:
Nintendo can perform a hostile takeover soon, once and for all getting their revenge on Sony over the whole CD drive thing.

(yes, not serious)

Nintendo just recently made a big acquisition, I don't think they got that much cash to spare in the moment.