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Moody's lowers Sony's credit rating again


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Initial post: Nov 9, 2012 7:45:24 AM PST
http://www.zdnet.com/sony-rating-lowered-to-one-point-above-junk-status-by-investors-7000007163/

Investor services firm Moody's has reclassified the ailing electronics firm to one point above junk status.

Shrinking consumer demand for electronics has resulted in the Japanese firm's long-term debt rating being lowered one notch, according to Reuters.

Moody's Investor Service now considers the firm applicable to the lowest investment grade level possible before hitting "junk status". Once a company hits this grade, otherwise known as a "BB" rating or "high-yield bond", any investment made is high-risk by default -- something which could impact the company's plans to restructure and recover.

In October, the investment firm began downgrading Sony's status, believing the electronics maker's prospects, despite restructuring efforts, remained negative.

If Sony's rating is cut by one more point, some funds may be forced to offload debt, and the firm may find itself restricted in how much money it would be allowed to raise in credit markets.

"Without robust restructuring in the coming 12-18 months, Sony's non-financial services businesses will at best achieve roughly break even, and are also at risk of remaining unprofitable," the rating agency said in a recent report.

Sony's Q2, ending September 30, resulted in an operating profit of $388 million, in comparison to a $20 million loss in the same quarter within FY2011. The ailing electronics maker made a loss of $5.7 billion last year and $312 million in the first quarter.

As part of restructuring efforts implemented by CEO Kazuo Hirai, the electronics giant plans to close a number of offices within Tokyo, Japan, has created a voluntary retirement program for employees and the eventual dismissal of 10,000 workers from its global workforce.

Posted on Nov 9, 2012 7:56:56 AM PST
got mayo?™ says:
"Sony's non-financial services businesses will at best achieve roughly break even, and are also at risk of remaining unprofitable,"

If that is the case, wouldn't interest on additional debt create an environment where it will work against generating profit?

It sounds they are in a position they wouldn't be able to loan their way out of this, they may be forced to sell additional assets and continue downsizing as a company.

Posted on Nov 9, 2012 7:59:56 AM PST
Come on Sony, pull out of this!

On a more personal note, methinks it's time to invest in some Sony stock.

In reply to an earlier post on Nov 9, 2012 8:06:51 AM PST
Last edited by the author on Nov 9, 2012 8:07:54 AM PST
M. McFly says:
On a more personal note, methinks it's time to invest in some Sony stock.

Based on what? They need to abandon the TV business(lost money 7 years in a row) camera's are dying via smartphone, they missed out on the smartphone tablet craze, PC's are dying and they can't make any money on their video game business. They need to start charging for online which doesn't appeal to their core market. Most importatly they haven't had an innovative product in at least a decade, blu ray and 3D are not going to ever generate much of a profit. Apple and Samsung have pretty much destroyed Sony. And then they have deep pockets MSFT to deal with in video games.
I will say if they manage a turn around their is money to be made but for now I am sitting on the sidelines.

In reply to an earlier post on Nov 9, 2012 9:20:41 AM PST
Super cheap and I don't see them failing. It's a low-risk, high-reward proposition. This is how you make money.

In reply to an earlier post on Nov 9, 2012 10:08:37 AM PST
Last edited by the author on Nov 9, 2012 10:08:59 AM PST
Oskar says that Wonderbook is going to be very successful and its at the top of the wish lists of every kid he knows. If you want a piece of that you might want to buy Sony stock before it launches.

In reply to an earlier post on Nov 14, 2012 7:29:00 AM PST
M. McFly says:
The stock is in a free fall today, down 8% below $10. Its all about timing, if you assume they wont go bankrupt picking the time to get in is very difficult....

In reply to an earlier post on Nov 14, 2012 7:31:26 AM PST
Man that's cheap. Provided they don't go bankrupt one could make a freaking fortune.

In reply to an earlier post on Nov 14, 2012 7:38:03 AM PST
McAwesomeo says:
I wish I had bought Ford stock circa 2009, I would have made a killing. But that was when I was still working part time and the initial investment required was beyond what I had available at the time.

In reply to an earlier post on Nov 14, 2012 7:42:01 AM PST
Just last year Sony was trading at $30. If you bought 100 shares today and it went back to there, you could make $2,000. Hell, in 2000 it was $150 a share, how about $14,000 for your $1,000 investment?

In reply to an earlier post on Nov 14, 2012 7:42:46 AM PST
jtshiel says:
Ewww
Math.

In reply to an earlier post on Nov 14, 2012 7:43:58 AM PST
Yeah, this is what I do. I make numbers with dollar signs go.

Posted on Nov 14, 2012 7:45:31 AM PST
Dukeshire says:
In other news:

Upon hearing the news Flores and Dougie a la Thelma and Louise drive off a cliff to their death.

McClane and M in celebration mistake paint thinner for booze and their livers explode like a hand grenade....Oddly, both were naked and intertwined and McClane was a Trannie (Not that there is anything wrong with that).

Posted on Nov 14, 2012 7:48:00 AM PST
It doesn't come as a shock I mean people knew that there's going to be major hurdles in the restructuring of the Sony company and it's going to take bad hits. If they can endure this and get back on their feet again in a few years then Sony will once again have a good future if not well while sad that's how the business world is.

In reply to an earlier post on Nov 14, 2012 8:05:20 AM PST
Last edited by the author on Nov 14, 2012 8:08:44 AM PST
Keller says:
I agree. I did the same with Ford back in 2007, it worked out great.

Edit:
Eff it, just put an order in for SNE. I figure if it goes from $10 to $40 over the next 10 years, I will be up 200k.

Posted on Nov 14, 2012 8:08:21 AM PST
M. McFly says:
I just wish they had some innovative and relevent products, they aren't doing anything to show a turnaround is coming. Still have time but at some point they need to breath some real life back into the company

In reply to an earlier post on Nov 14, 2012 8:12:44 AM PST
I'm sure some of their ideas are innovative but the biggest question for a business is will it be popular with target consumers and profitable against the cost of manufacturing and marketing.

In reply to an earlier post on Nov 14, 2012 8:16:21 AM PST
Mel says:
hahaha, last place is for losers Sonymites!

Posted on Nov 14, 2012 10:00:42 PM PST
Waldo says:
Trolls have such hard-ons for Sony's demise! I don't get it, if you love video games, why wish bad on anything video game related?

In reply to an earlier post on Nov 14, 2012 10:11:32 PM PST
I don't see Sony going back to $150 anytime soon, if ever.

In reply to an earlier post on Nov 14, 2012 10:13:00 PM PST
Oddly enough, it's the local Sonymites who wished doom on the 3DS and 360.

In reply to an earlier post on Nov 14, 2012 10:22:34 PM PST
Dukeshire says:
Jason, come on man, Sonymites are the victims! They are always the victims.....Sony is a struggling little indie company, trying to fight its way towards respectability against the evil behemoths that hold back gaming from the real gamers: Nintendo and M$.

Sony cares about the little man, they care for their employees, the environment, babies, and they are working on a cure for cancer and male pattern baldness.

One of these days, the small company that is Sony will not be attacked and slandered, and one day they will be on top of the gaming world and all will be right in the world.

Posted on Nov 14, 2012 10:22:36 PM PST
Last edited by the author on Nov 14, 2012 10:24:41 PM PST
Waldo says:
There are more video game based trolls who are Hardcore XBots that wish the demise of Sony than anyone else! Just look to the video game forums for proof. How many troll posts against Sony are there that are coming from XBot fans? LOTS! Sony & Nintendo are the most neutral than all. Even PC gamer's aren't as jerks like the Xbox crowd!

In reply to an earlier post on Nov 14, 2012 10:24:10 PM PST
Okay, try this.

Go back ten pages and see how many people are wishing for the demise of the PlayStation.

In reply to an earlier post on Nov 14, 2012 10:24:14 PM PST
Dukeshire says:
You are joking? Right?
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Discussion in:  Video Games forum
Participants:  13
Total posts:  29
Initial post:  Nov 9, 2012
Latest post:  Nov 15, 2012

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