| Nem said: That simple. Stocks were just a means companies came up with to raise capital. |
Actually, stocks are a strong indicator of a company's current status. Why? Because people buy stocks based on a company's current status and it's current direction. They invest if they think that it's going to have a strong season, and they sell their stocks if they think it's going to be weak. If a company makes a strong profit, people rush to buy the stocks. If a company loses a lot of money, people try to sell their stock as quickly as they can.
In other words, stock price is a good barometer of company status because investors pay attention to that status and react accordingly. What it's not is a good barometer of where the company is actually going. This is because investors have only partial understanding of the market and the upcoming products. This is why Nintendo's stock only started going up after the hype built up, and why it has been declining recently despite the upcoming Wii U launch.
It is indeed silly to suggest that low stocks means Sony is about to die... but it does indicate that Sony is in dire straits. They need a win, and they need it soon.
