It’s no secret that Sony isn’t doing so well financially and in a recent board meeting a proposal was put forward to split off the powerful entertainment division.
The idea is quite simple really; take your huge and bloated division, spin it off into a new company and then trim the fat to increase profits. Or in other words: be American and squeeze it for everything it has before discarding it like yesterdays toilet paper.
However in a country as steadfast as Japan the idea of splitting companies to maximise profits doesn’t sit very well and I personally am quite glad they decided against the idea. However I do think Sony needs to re-look at their electronics division and pay special attention to stop it destroying their bottom line.
Unfortunately the world’s investors didn’t take kindly to the decision and Sony’s share price has plummeted after hours trading dropping 4.5%
But it’s not all doom and gloom, as the stock has increased 100% so far this year alone and Sony may well be on the path to revival.
Last Updated: August 7, 2013
August 7, 2013 at 10:45
Although this initially causes an almost 5% drop in share price I think it’s the right decision! Sony electronics is in deep doodoo but the software is doing relatively well! Should they split the 2 I doubt it if Sony electronics would survive at all! Sony electronics now needs a 180 when it comes to plunging money into unsuccessful concepts like the “smart watch” and dare I say it the Vita! Simplify, cut costs (maybe sell a few more buildings etc. ????) and give the company time to recover completely riding on the revenue it will undoubtedly receive from PS4 sales! Stupid business decisions got them where they are now (dropping the eye to undercut MS might still come back to bite them given the R&D that must’ve gone into designing/manufacturing it). They will have to tighten the belt, and I foresee a big clamp down on “free” services and goodies from Sony! In the end they must survive if only to ensure good competition so all the best to them!