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

[Dodece]

@Wlakiz

Your viewpoint seems to counter indicate investing in Sony. Seeing as they are selling off non core businesses even if they are profitable. To funnel more resources into technology. They are effectively reversing their diversification, and upping their bid on riskier investments. I am curious as to how you justify your investment given what their stated goals are as a company. I can understand betting on a diverse portfolio seeing as it is safe, but Sony seems to be just plain shredding their portfolio. That seems to leave them more exposed to market volatility.

Which brings us back to the bonds. I agree with your analysis of debt in a general sense, but are we talking about funding expansion, or covering operating expenses. I agree that expansion can generate returns on investment that can exceed the interest owed. I just don't see many of us believing that the majority of this is actually about Sony wanting to finance expansions. Sony is actually on the whole shrinking. The assets that Sony has sold off should be generating enough capitol to cover reinvestment. Unless the company is spending far more money then it is making.

Borrowing to grow can be a good thing, but borrowing to cover day to day expenses can be a bad thing. Terribly so when the global economy is entering a slowdown. It might become harder to borrow money, and if Sony ends up stuck. It could end up having to substitute its scalpel for a chainsaw. Anyway I am interested in how you are reconciling these issues in your mind.