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

theprof00 on 15 November 2012
Dodece said:
Talk about the facade starting to crumble. It seems that reality is finally starting to overcome partisan bickering. Had something like this been posted six months ago this thread would have been awash in spin, and recriminations would have been made against the original poster as if they had willed the news into existence. That said there is still a little too much softening going on in regards to the truth.

I for one am tired of hearing about how Sony is or was a great company. You don't eat your way to greatness. That is something that comes from within. The reality is pretty simple to understand conglomerates don't have a soul. They just eat whatever looks good to them. Which brings me to my next point Sony isn't great, because it is still trying to eat its way to greatness. Instead of trying to win from within. It is just trying to buy any company it thinks might have greatness within itself.

All Sony is doing right now is binging and purging, and that is in no way whatsoever making the right move. They are gambling on beating the market to that next big thing. Even more damning then that they aren't even being at all particular about what they are picking up. Like a Stoner on a Midnight Munchie run. The rhyme or reason in what they are buying makes no sense, because none of what they are buying particularly works together. Which brings me to my next point.

Sony didn't just start behaving like this recently. They have been restructuring for five years now. Wait did I just say restructuring. Surely they haven't been doing that for five years. After all restructuring is the panacea that is going to cure Sony. Well I hate to be a downer about this, but the medicine hasn't worked yet. To be fair thought Sony hasn't been following the directions on the bottle. When a company restructures it should downsize staff, sell off assets, condense divisions, and cut product lines. While it is true that Sony has done that it has also done things that are just plain counter indicated.

Which brings me back to my original point. Sony isn't a great company, because they haven't learned that business as usual is what was killing them. When you go on a diet you can't go out buying junk food. It is almost like some kind of bent obsessive compulsive disorder entirely divorced from reality. Like a modern day Hearst. There is no real good logic why anyone should be out buying new stuff when the problem is everything else they have is broken. You need to fix your house before you go out to buy new furniture.

The point is this until Sony stops buying shit they are never going to get out of the hole they are digging. The money Sony has blown on acquisitions, incurring debts, and adhering to failed product lines. Is nothing less then gambling on a long shot. There is a time for taking risks, but there is also a time for prudence. Had Sony tried the latter for the past five years they just might be profitable today.

It's fitting that your open letter to "fanboys" is puncutated by an xboxlive signature.



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Wlakiz on 15 November 2012

... if you guys have taken out a mortgage before you would understand the concept.

Lets say you borrow $300k from the bank to buy a home . In the bank's perspective, they are happy because they get free money from charging you interest rate, and you are happy yourself because you get to live in a new house or w/e. With a stroke of luck, you win a lottery and you get $70k. You can either put that money into the first mortgage and cut your amortization period by 10 years or you can do something smarter and use that $70k to put in a second down payment and get a second mortgage. Whoa whoa, wait you say, you're just going into deeper debt, because you have two mortgage to pay now! Yep, that's true but you see when I get a new home I can rent it out and use the rent to pay the mortgage, so basically my asset doubled and I pay the same amount as before.

Is Sony's situation the same? Absolutely! They are borrowing more money to invest on products/ventures that would yield them returns. What happens if the investment does not yield the desired return? No problem, it is still within their power to sell whatever they invested to pay off their creditors. The only 'risk' is if their investments becomes worthless and selling wouldn't help them pay off the creditors in which they would have to default on their payment. Right now, Sony is selling part of their assets so they can get the cash to keep the creditors happy and for them to continue investing.



yanamaster on 15 November 2012
theprof00 said:
Dodece said:
Talk about the facade starting to crumble. It seems that reality is finally starting to overcome partisan bickering. Had something like this been posted six months ago this thread would have been awash in spin, and recriminations would have been made against the original poster as if they had willed the news into existence. That said there is still a little too much softening going on in regards to the truth.

I for one am tired of hearing about how Sony is or was a great company. You don't eat your way to greatness. That is something that comes from within. The reality is pretty simple to understand conglomerates don't have a soul. They just eat whatever looks good to them. Which brings me to my next point Sony isn't great, because it is still trying to eat its way to greatness. Instead of trying to win from within. It is just trying to buy any company it thinks might have greatness within itself.

All Sony is doing right now is binging and purging, and that is in no way whatsoever making the right move. They are gambling on beating the market to that next big thing. Even more damning then that they aren't even being at all particular about what they are picking up. Like a Stoner on a Midnight Munchie run. The rhyme or reason in what they are buying makes no sense, because none of what they are buying particularly works together. Which brings me to my next point.

Sony didn't just start behaving like this recently. They have been restructuring for five years now. Wait did I just say restructuring. Surely they haven't been doing that for five years. After all restructuring is the panacea that is going to cure Sony. Well I hate to be a downer about this, but the medicine hasn't worked yet. To be fair thought Sony hasn't been following the directions on the bottle. When a company restructures it should downsize staff, sell off assets, condense divisions, and cut product lines. While it is true that Sony has done that it has also done things that are just plain counter indicated.

Which brings me back to my original point. Sony isn't a great company, because they haven't learned that business as usual is what was killing them. When you go on a diet you can't go out buying junk food. It is almost like some kind of bent obsessive compulsive disorder entirely divorced from reality. Like a modern day Hearst. There is no real good logic why anyone should be out buying new stuff when the problem is everything else they have is broken. You need to fix your house before you go out to buy new furniture.

The point is this until Sony stops buying shit they are never going to get out of the hole they are digging. The money Sony has blown on acquisitions, incurring debts, and adhering to failed product lines. Is nothing less then gambling on a long shot. There is a time for taking risks, but there is also a time for prudence. Had Sony tried the latter for the past five years they just might be profitable today.

It's fitting that your open letter to "fanboys" is puncutated by an xboxlive signature.


But the guy is correct in general.

Of course restructuring a company doesn't mean that you shouldn't spend money on something but nevertheless you have to spend this money reasonably. Buying Gakai might be a great long term investment, but how does it help in the short-to-middle term?

I'm glad that some people talk about the probable profit the Sony might have for this fiscal year, but who's to say that they will manage to continue this trend later? Actually i find it hard to believe that they might profit at all within the next 12 months. The reason is of course that Sony hasn't cut off the main cancer of the company and with the amount of down scaling that they should head towards  i sometimes wonder why won't they just drop the damn tv division.

Keeping that division up and running seems more like a vanity project from Sony than an actual business.

in addition, I get the sinking feeling that the profit that Sony believes in achieving is based on a sudden explosion in the western economies accompanied by a sudden drop in Yen value.

Honestly, that won't happen until the US and UE get their act straight with their debts. And it's anyones guess as to when that will happen.



If i lose access to this profile as well....I'm done with this site.....You've been warned!!.....whoever you are...

Happy Wii60 user. Me and my family are a perfect example of where hardcore meets casual and together mutate into something awesome.

Dodece on 15 November 2012
theprof00 said:
Dodece said:
Talk about the facade starting to crumble. It seems that reality is finally starting to overcome partisan bickering. Had something like this been posted six months ago this thread would have been awash in spin, and recriminations would have been made against the original poster as if they had willed the news into existence. That said there is still a little too much softening going on in regards to the truth.

I for one am tired of hearing about how Sony is or was a great company. You don't eat your way to greatness. That is something that comes from within. The reality is pretty simple to understand conglomerates don't have a soul. They just eat whatever looks good to them. Which brings me to my next point Sony isn't great, because it is still trying to eat its way to greatness. Instead of trying to win from within. It is just trying to buy any company it thinks might have greatness within itself.

All Sony is doing right now is binging and purging, and that is in no way whatsoever making the right move. They are gambling on beating the market to that next big thing. Even more damning then that they aren't even being at all particular about what they are picking up. Like a Stoner on a Midnight Munchie run. The rhyme or reason in what they are buying makes no sense, because none of what they are buying particularly works together. Which brings me to my next point.

Sony didn't just start behaving like this recently. They have been restructuring for five years now. Wait did I just say restructuring. Surely they haven't been doing that for five years. After all restructuring is the panacea that is going to cure Sony. Well I hate to be a downer about this, but the medicine hasn't worked yet. To be fair thought Sony hasn't been following the directions on the bottle. When a company restructures it should downsize staff, sell off assets, condense divisions, and cut product lines. While it is true that Sony has done that it has also done things that are just plain counter indicated.

Which brings me back to my original point. Sony isn't a great company, because they haven't learned that business as usual is what was killing them. When you go on a diet you can't go out buying junk food. It is almost like some kind of bent obsessive compulsive disorder entirely divorced from reality. Like a modern day Hearst. There is no real good logic why anyone should be out buying new stuff when the problem is everything else they have is broken. You need to fix your house before you go out to buy new furniture.

The point is this until Sony stops buying shit they are never going to get out of the hole they are digging. The money Sony has blown on acquisitions, incurring debts, and adhering to failed product lines. Is nothing less then gambling on a long shot. There is a time for taking risks, but there is also a time for prudence. Had Sony tried the latter for the past five years they just might be profitable today.

It's fitting that your open letter to "fanboys" is puncutated by an xboxlive signature.

That is so they can send me friend requests when they get on Live. Seriously though I am not trying to be a dick about it at all. I genuinely think that what Sony is doing is truly idiotic, and it is going to make them entirely uncompetitive next generation. I have said it before I like the arguments, and if Sony ends up leaving this market, because they squandered all their money. Then it will just be Microsoft against Nintendo, and that is just going to be pathetic in comparisson. You gotta kind of admit it would suck too. At the rate things are going Microsoft is just going to pulverize Sony.



http://live.xbox.com/member/Dodece

rrrnearrr on 15 November 2012

I'm surprised nobody mentioned this yet:

What about next gen?

If it is certain to lose money on the first years of the generation, how is that even remotely possible they expect a brighter future? Can they afford another 3 billion loss, plus, the "PlayStation" brand is nowhere near as powerful as it was back in 2006, so the initial amount of buyers would be a lot smaller.



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coolguy on 15 November 2012

They need to sell there tv disvion..



VITA 32 GIG CARD.250 GIG SLIM & 160 GIG PHAT PS3

DirtyP2002 on 16 November 2012

@slimebeast

It is all about Return on equity.

If a company borrows money for an investment, the balance sheet will grow on both sides (debt + investment). The profit should increase due to the investment. So the ROE increases, but the equity will be the same. Therefore ROE increases.

As easy as it sounds there is a point when you should not use borrowed money. A company should always use equity to "secure" the parts of the company that are necessarily needed for the core business (e.g. a car manufacturer should finance the factories as secure as possible). And the return of the investment needs to be higher than the interest for the borrowed capital.



Imagine not having GamePass on your console...

runqvist on 16 November 2012

I think Microsoft has a good chance to make Sony bleed too much for their own good next gen. Now it is time to flex those financial muscles!



Galaki on 16 November 2012

Well, we also have Sony enthusiasts defending Sony spending hundreds of millions buying a stream gaming service that they could have got for less than 5 millions if they bothered to shop around.



Pre-order limited edition Blue Slime Condoms

fillet on 16 November 2012
Dodece said:
Talk about the facade starting to crumble. It seems that reality is finally starting to overcome partisan bickering. Had something like this been posted six months ago this thread would have been awash in spin, and recriminations would have been made against the original poster as if they had willed the news into existence. That said there is still a little too much softening going on in regards to the truth.

I for one am tired of hearing about how Sony is or was a great company. You don't eat your way to greatness. That is something that comes from within. The reality is pretty simple to understand conglomerates don't have a soul. They just eat whatever looks good to them. Which brings me to my next point Sony isn't great, because it is still trying to eat its way to greatness. Instead of trying to win from within. It is just trying to buy any company it thinks might have greatness within itself.

All Sony is doing right now is binging and purging, and that is in no way whatsoever making the right move. They are gambling on beating the market to that next big thing. Even more damning then that they aren't even being at all particular about what they are picking up. Like a Stoner on a Midnight Munchie run. The rhyme or reason in what they are buying makes no sense, because none of what they are buying particularly works together. Which brings me to my next point.

Sony didn't just start behaving like this recently. They have been restructuring for five years now. Wait did I just say restructuring. Surely they haven't been doing that for five years. After all restructuring is the panacea that is going to cure Sony. Well I hate to be a downer about this, but the medicine hasn't worked yet. To be fair thought Sony hasn't been following the directions on the bottle. When a company restructures it should downsize staff, sell off assets, condense divisions, and cut product lines. While it is true that Sony has done that it has also done things that are just plain counter indicated.

Which brings me back to my original point. Sony isn't a great company, because they haven't learned that business as usual is what was killing them. When you go on a diet you can't go out buying junk food. It is almost like some kind of bent obsessive compulsive disorder entirely divorced from reality. Like a modern day Hearst. There is no real good logic why anyone should be out buying new stuff when the problem is everything else they have is broken. You need to fix your house before you go out to buy new furniture.

The point is this until Sony stops buying shit they are never going to get out of the hole they are digging. The money Sony has blown on acquisitions, incurring debts, and adhering to failed product lines. Is nothing less then gambling on a long shot. There is a time for taking risks, but there is also a time for prudence. Had Sony tried the latter for the past five years they just might be profitable today.

Impressive post, you have my respect for taking the time to type a well thought out, clear summary of your view.