This year has not been kind to Sony, as the consumer electronics company’s stock has hit a 32-year low with a 7% decline — a low that the company has been teetering towards since 2008-2009. Not since the year 1980 has Sony seen such low shares, and experts aren’t expecting things to change in the near future.
Investors seem to be very pessimistic as to how the company will bounce back from this slump. The biggest factor to this lull would be Sony’s $6.4 billion in losses claimed for 2011 and the potential 10,000 employee layoff. Kaz Hirai, new CEO of Sony, admitted when taking the job that taking the reins and turning the company around would not be an easy task.
Getting hit from other angles besides the video game industry, Sony is also seeing roadblocks by the likes of Samsung and LG, leading the way in the TV markets with OLED displays. Times are grim for Sony – evident from the stock decline – and although there are forecasts that predict an optimistic future, that’s far from a confirmation that things are going to get better before getting any worse.
Deutsche Bank analyst Yasuo Nakane states that at this time, there doesn’t seem to be any “catalyst that might spur a sustained rally” for the company’s shares, while analyst Shiro Mikoshiba of Nomura Equity Research explains that uncertainty surrounding nearly every market Sony operates within makes any reliable predictions nearly impossible.
With their sights set on digital imaging, mobile, and video games, Sony looks to recover at least some of their losses. Hirai believes that Sony can increase smartphone sales by 11.5 million units, and double handheld sales by up to 16 million units.
Luckily for the games division at Sony, they might not even be hit with any layoffs. And with this new concentration on video games, specifically strengthening the position of the PS Move, perhaps Sony can at least bring back some sense of optimism. If Sony is to make a comeback, one would assume now would be the best time to invest with stocks reaching as low as 14 points.
As the saying goes, it is always darkest before the dawn, but how long will it take for Sony to see the light? Could the company sink any lower than it is at right now? What do you think Sony has to do to get out of this sticky situation?
Follow me on Twitter @TyRawrrnosaurus.