Sony Stock Rises After Studio Cancels 'The Interview' Release
The stock rose 4.8 percent, outperforming Japan's benchmark Nikkei stock index
Sony Corp.'s stock closed 4.8 percent higher in Thursday trading in Japan after its film studio unit pulled the theatrical release of The Interview following threats of violence against cinemas screening the film.
The nation’s largest exhibitors had all decided not to show the comedy with Seth Rogen and James Franco due to the threats from hackers that have been releasing Sony movies, executive emails and other material online.
In the U.S., Sony shares also rose on Thursday. They were up 3.3 percent as of 11:30 a.m. ET.
The Thursday stock gain came as Asian markets in general rose on Thursday, helped by the latest economic and monetary policy comments, but Sony's stock handily outperformed the 2.3 percent increase of Japan's benchmark Nikkei stock index. Sony's stock is typically more driven by various other factors, including economic trends and oil prices, but at least one Japanese observer argued that it seemed to outperform the market Thursday partly due to the cancelation.
"Investors think that from here on, further damage probably won't be done," Reuters quoted Makoto Kikuchi, CEO of Myojo Asset Management, as saying. "Whether that justifies a 5 percent jump in Sony's stock, I'm not so sure."
Daniel Ernst, analyst at Hudson Square Research, told THR: "The cancellation, while unfortunate, does provide some degree of certainty on the outcome. Uncertainty of an event creates stock volatility."
It also cited an estimate from Macquarie analyst Damian Thong, from before the cancelation of The Interview, that losses from the hacking, including online leaks of other movies, would likely be around $84.4 million.
Dec. 18, 8:30 a.m. Updated with U.S. stock price.