Sony to sell $1.9bn of conv bonds, stock down 10% in early trading.

[CChaos]

kowenicki said:

CChaos said:
Well, I think one thing we can all agree on, wholeheartedly, is that the Sony of the future will be a different beast than the Sony of today. It's strange to think about, considering most of us have grown up around Sony products, but this is going to come down to a few very important points that go beyond things like the game division.

1) Can they profit enough in the short term to not only break even, but to break even enough to pay off their mass of debts?
2) What will stay and what will go? Extreme measures require extreme choices. This does mean that they might be forced to kill or sell entire divisions. The death of the Sony TV could still be possible.
3) How are they going to streamline for the future?

At least most people aren't using the infuriating term that 'Sony is too big to fail' any more. Kaz appears awake and I'd bet you good money now that the engineers and executives have put down this 'us vs. them' attitude for the sake of mutual survival. It's not until people start realizing the potential threats that they start working their asses off to prevent it. I think it's safe to say the realizations have kicked now. Now to see what they do about it.

Good summary.  Sony are currently in a phase of downsizing, I think if may well accelerate. Sony of tomorrow will be significantly smaller than Sony of yesterday. 

I couldn't agree more. And they probably need to be smaller. See, one needs to consider the variation in companies as well.

Consider, if you will, the Western vs. the Eastern company.

Western companies (and now certain Eastern ones) seem to have a good idea that mobility is the key to survival in the world of business. When something starts to shift, they are quick to try and take advantage of it while also speedy in stemming the blood flow of the wounded parts of their own corporation. They raise and shut wings with impunity, for the best of the company.

(Mostly older) Eastern companies are monolithic in nature. They are massive, monstrous structures. At one point, Sony, Panasonic and Sharp were the eidolons. They were the ideal of what makes for success. Truly amazing companies back until the 2000s, when they all started dropping. When Sony started losing money on their TV division, they doubled down to tough it out. This is why that division hasn't been in the black for eight years. A western company would have downsized the crap out of it and, if it didn't make money, would have liquidated it and moved on. Sony couldn't do that because it has its tradition in televisions. They wanted it to succeed, but have been slogging hard for years to get it back to simple profitability. They aren't the drop and run types, basically.

Basically, what people are seeing here is Sony in the pains of trying to shed its skin through Kaz. Looking at Sharp and Panasonic, this is not an easy change, but Sony needs to shift its behemoth nature to something closer to modern needs if it's trying to survive. As such, you see the titans of Japanese business basically on the ropes and trying to shift enough to stick it out. Sharp probably won't survive. Panasonic might, but that's a big if. Sony...hard to tell either way right now.

Basically, we're in the middle of watching a truly bizarre shift of corporate nature. A historic shift, perhaps.