Sony's Stock Drops to Lowest Level Since 1980
Sony shares fell below 1,000 yen ($12.80) on the Tokyo Stock Exchange Monday as the entertainment and electronics group is battling rivals in its core product categories and a strong currency.
TOKYO – Sony Corp. shares fell below 1,000 yen ($12.80) on the Tokyo Stock Exchange on Monday, hitting their lowest level since 1980.
The stock of the entertainment and electronics giant, which has faced competition in its core product categories and a strong currency, ended down 1.7 percent at 996 yen ($12.76) on worries of a global financial slowdown.
The market capitalization of Sony hovered just above one trillion yen ($13 billion), having fallen around 90 percent since the turn of the millennium.
The Monday low hit by Sony's stock marked its lowest point since 1980, the year after it introduced the Walkman portable cassette player, according to Bloomberg data. It last closed below 1,000 yen on Aug. 1, 1980, according to Bloomberg. The company's shares have been declining in recent weeks, leaving the stock down nearly 30 percent for the year.
Sony posted a fourth straight year of losses last month, with a record $5.7 billion in red ink, and new CEO Kazuo Hirai announced 10,000 job cuts as part of a restructuring plan to get the company back into the black.
In addition to competition from rivals such as Samsung and Apple, the Tokyo-based conglomerate is struggling to cope with a strong yen that makes exports expensive and reduces the value of earnings it brings back to Japan.
Sony has made itself "dollar-neutral" in recent years, meaning fluctuations in the value of the greenback no longer affect its bottom line. However, the continuing weakness of the Euro does hurt its profitability. The Euro has fallen from almost 170 yen in 2008 to around 97 yen this week.
The Nikkei 225 stock index closed down 1.71 percent on Monday, its lowest level this year.