Sony (SNE) Will Have To Sell Its Studio Business, Could Get $6 Billion

Sony (SNE) is in trouble, and it is very deep trouble. For the fiscal year ending March 31, the conglomerate lost more than $1 billion on $79 billion in revenue. Sales were down by over 12%

Sony could do several things with the cash. It might give shareholders who are tired of the company’s constant struggles a larger dividend or share buyback. Sony’s market cap is only $28 billion, so it could purchase a significant portion of its shares. Sony could also use the money for its capital expenditures or to reduce its modest debt. The cash could certainly be used for strategic acquisitions to buttress its flagging electronics and game divisions.

Douglas A. McIntrye

http://247wallst.com/2009/06/07/sony-sne-will-have-to-sell-its-studio-business/

This is pure rentier idiocy. Total losses are under 1% of annual sales, far less than many other companies, despite the depth of the recession. Sony doesn't have much debt and has plenty of cash flow, so it doesn't need the extra cash. This notion of giving the money to "shareholders" is a sick joke -- a polite way of saying, forking billions over to a bunch of greedy, self-interested oligarchic scum who don't know a frame-rate from an interest rate, and whose speculative folly screwed up the world-economy so bad, it needed a $4 trillion (and counting) government bailout financed by ordinary taxpayers like you and me.

Here's a better idea: instead of financing the yachts and private jets of Wall Street overlords, Sony does what it always does -- spend money on world-class studios, top-tier technology and great games.

This is pure rentier idiocy. Total losses are under 1% of annual sales, far less than many other companies, despite the depth of the recession. Sony doesn't have much debt and has plenty of cash flow, so it doesn't need the extra cash. This notion of giving the money to "shareholders" is a sick joke -- a polite way of saying, forking billions over to a bunch of greedy, self-interested oligarchic scum who don't know a frame-rate from an interest rate, and whose speculative folly screwed up the world-economy so bad, it needed a $4 trillion (and counting) government bailout financed by ordinary taxpayers like you and me.

Here's a better idea: instead of financing the yachts and private jets of Wall Street overlords, Sony does what it always does -- spend money on world-class studios, top-tier technology and great games.

This is amazingly out of touch with reality. WOW I do not think people should attempt to discuss things they do not know very much about.

The primary responsibility of a company is profit maximization for its shareholders within law/regulations.

When a company performs well enough to achieve profitability, it usually has two choices: Reward its shareholders or reinvest within the company.

How do you think companies raise equity capital? Investors contribute money in exhange for stake in a company. Said investors usually expect a return on investment.

And I thought it was common knowledge in the business world that Sony is in a very tough spot right now?

I don't see how this refutes the earlier argument  , infact I think it makes it stronger . If shareholders force Sony's hand then  by making them sell of the more profitable divisons of the business then they risk de-valuaing Sony and hence their shares in the longer term, even if they get a quick n easy return on their investment. And other objectives of a business is to grow a sustain growth , this one of the only ways the main aim of larger profit margins can be achieved, some investors are more patient than others.

Did you actually read the post I was directly replying to? How does that make the post any stronger? You definitely lost me...especially when he/she insists Sony doesn't have much debt and plenty of cash? That alone discredits the entire post. I never agreed or disagreed with the idea of Sony selling off anything. Whatever happens, I want Sony to be around in the future. But the ideas communicated in the post are just flat out wrong and do not make much business sense.

"The notion of giving money to shareholders is a sick joke" 

...that came from the original post I replied to.

lol um, hello...all assets of the company belong to the shareholders! That includes the money!

Your response to my post even further boggles my mind, because I never attempted to disprove any of the things mentioned in your post. What's your motivation?

This is pure rentier idiocy. Total losses are under 1% of annual sales, far less than many other companies, despite the depth of the recession. Sony doesn't have much debt and has plenty of cash flow, so it doesn't need the extra cash. This notion of giving the money to "shareholders" is a sick joke -- a polite way of saying, forking billions over to a bunch of greedy, self-interested oligarchic scum who don't know a frame-rate from an interest rate, and whose speculative folly screwed up the world-economy so bad, it needed a $4 trillion (and counting) government bailout financed by ordinary taxpayers like you and me.

Here's a better idea: instead of financing the yachts and private jets of Wall Street overlords, Sony does what it always does -- spend money on world-class studios, top-tier technology and great games.