PS3 Announcements Fail to Halt Sony Stock Slide

Despite a seemingly strong positive reaction from the industry following Sony's long-awaited announcement of a price cut for the PlayStation 3 - and the impending launch of the PS3 Slim - shares in the Corporation continued to fall yesterday, continuing a steady descent from their two-month peak at the beginning of last week.

The stock closed down by 1.4 per cent today on the Tokyo Stock Exchange to sit at JPY 2445 (USD 26.02), declining yet further from its peak of over JPY 2770 (USD 29.48) on August 10 - a drop of around 12 per cent in total.

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shocky163565d ago (Edited 3565d ago )

Just kidding :).. I actually bought a PS3 since the price drop, pretty excited about playing Uncharted first. =)

morganfell3565d ago

There won't be a stock improvement due to the announcements until sales figure come in to boost them.

JL3565d ago (Edited 3565d ago )

This has nothing to do with the popularity or the pre-sales of the Slim. Rather it has to do with investors' opinion of the price cut. Which seemingly they didn't like over there, possibly due to them thinking the price cut will cut into Sony's money even more (which probably doesn't bode well for those investors who think that after recently coming off of a 390 million dollar loss). Though I personally think that's being a bit short-sighted about the deal as this new model cuts part of the expense that Sony had for that quarter as well, they'll still likely be making money, and these things are going to sell like hotcakes.

But, like I said, stock dropping has nothing to do with how popular the Slim is (we know it is, just look at Amazon), but is more a reflection of the investors' "disagreement" with the price cut.

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ultimolu3565d ago

Well, I wouldn't expect for Bloodmask to use his God-given intelligence either way.

meepmoopmeep3565d ago (Edited 3565d ago )

you know,

Bloodmask submits the news, he doesn't write it.
unless he works for

anyway, it doesn't help when a site like Forbes makes such articles the day of a slim announcement
but you would think the stocks would rise from it.

rockleex3565d ago (Edited 3565d ago )

Consist of only Playstation. -_-"

Why would Sony stocks as a whole halt its drop just because of the PS3 Slim? O_o

Sarick3565d ago (Edited 3565d ago )

Sony recently announced they're halting OLED screen technology production do to extreme losses in the OLED market. The gaming division isn't the only reason for this stock change. THE OLED announce just days ago was very concerning to stock holders.


When I saw this I see trouble brewing. It's not always the best thing to halt production of your advanced technology unless there is a concern at the top. I'm sure the stock holders saw this as bad news too.

The Lazy One3565d ago

The stock went down because sony just announced a huge price cut when they promised they were going to be concentrating on profits. I'd be upset if I were a stock holder too.

@information minister

no it hasn't. It's been bouncing around +/- 2 % for the past few weeks.


commodore643564d ago (Edited 3564d ago )

@ x__JL__X

dude, that's a very insightful post.

Investors are a savvy lot.
Investors, by arbitrage (bid/ask, supply demand) are the ONLY people who determine the price of shares/stocks.

The fact that the share price has dropped is a true indication of investor sentiment.

Consider the market's reaction to a slim ps3.
The share price drops!

Maybe the investors that determine the buying and selling of sony shares deem the latest ps3 pricecut as detrimental to the performance of the company?

.. when you think about it, that makes sense.
Maybe the falling shareprice speaks volumes about the expected losses of the $299 Slim?

Any student of behavioural finance and portfolio theory will likely agree that overall investor expectations are testament to the true underlying company position.

Question is, what do the people on the inside, who are privy to the TRUE profitability of Sony's latest ps3 pricecut, say about it?

The answer may be found in the falling Sony shareprice.
That is undeniable.

Anon19743564d ago (Edited 3564d ago )

When Sony and Microsoft release their earnings updates, PS3 and 360 sales are a simple footnote. And why? Because the revenue each of these bring in pales in comparison to each company's larger business. Reputable analysts don't even bother mentioning either of these with the exception of when they unexpectedly cause write offs in excess of a billion dollars.

The very notion that Sony shares should have rallied on this news is misleading on the authors part. Did Microsoft shares slide when the 360 posted year over year declines in 2007? Did they suddenly tumble during this latest quarter because the 360 had it's worst sales quarter in 2 years? Of course not. No one even mentioned that fact.

Sony's stock price is down because of the appreciation of the yen versus the US dollar, plain and simple, like every single other Japanese electronics maker. It's easy for amateurs like Commodore to point out Microsoft's stock price and say "See! It's somehow better!" without ever considering that A) Foreign Exchange doesn't fluctuate Microsoft's stock and B) Sony and Microsoft aren't even in remotely the same industry overall.

Commodore said "Any student of behavioural finance and portfolio theory will likely agree that overall investor expectations are testament to the true underlying company position."
That's funny, and 100% false. The idea that markets and investor expectations are rational is one of the biggest falsehoods I've ever heard, let alone a reflection of a company's true underlying value. If that were true then what happened over a year ago when markets where at all time highs? Then when they crashed 35% and many company's were trading at below fair market value and P/E ratios came crashing down to historic lows. And now that the markets have somewhat recovered, where's your "true underlying company position" in all that? Was it at the top? At the panic bottom? Are we seeing it now?

Investors are a panicky, unpredicatable lot and share price is not a reflection of company position. This whole recent market turmoil is proof of that. Hedge funds and institutional investors were the first to bail at the start of the storm and precipitated the markets tanking. How is the reflective in any way of a company's position?

Commodore, you need to study more - or study less and get some real world experience.

commodore643563d ago (Edited 3563d ago )

Dear God, darkride66!

Are you truly so ignorant?
Back to school with you old boy...

You have been a salesman for too long to know what matters in financial markets!
Increasingly I feel that you have the intelligence and insight of a schoolboy. Judging by your logic thus far, and the fact that you represent a salesman in financial services, I must wonder if people like you, on salesman commission, shouldn't be held more accountable for the sub-prime mortgage mess!

Fact is, the market is always right!
When news comes out... the market reacts.
The reaction is testament to investor expectations!
In this case, the news came out, and the market tanked!
.... Sony stock dropped on negative PS3 earnings expectations.

Maybe stick to your sales job, huh, darkie?
At least there you can spout opinions and get commission, right?

Anon19743563d ago

Efficient-market hypothesis was first put forth in the early 1900's and then re-emergered in the 1960's. It is just a theory that takes a back seat the moment investor psychology comes into the equation.

It's a deeply flawed theory which has proved wrong time and time again, but for students it's required to learn about it.

And that's what comes across with your post. It's like you've just read a paragraph from a textbook but haven't yet related it back to the real world. EMH isn't how the markets work, it was just an idea. Time to either read some more or get some real world experience.

+ Show (11) more repliesLast reply 3563d ago
MGOelite3565d ago

yes this has nothing to do with the epic depression whats going on its all to do with the fact that the ps3 is sh!t and nobody will buy it/

darkknight09963565d ago

Strange the announcement should have ended the economy crisis and brought world peace... sorry the PS3 has failed???

Just I want to know what is the PS3 announcement have to do with the SONY shares if it SCE shares only I would understand. in case you do not know SONY has a lot more than just the PS3.

rockleex3565d ago (Edited 3565d ago )

Cured cancer too. Maybe even cure RROD. :P

commodore643564d ago

it all has to do with the recession, does it?
Strange then, that MS shareprice has been rising for the last 6 months.

But yeah... any excuse will do, right?

wxer3565d ago

a perfect timing to buy some Sony Stocks

Anon19743564d ago (Edited 3564d ago )

Sony's restructuring is still ongoing but consumer sales will begin to improve as we come out of the current recession, albeit slowly. What's more of a concern to Sony shareholders is the price of the yen versus the US dollar and Euro, which has caused Japanese electronics makers a decline in share value of 25% and has been impacting revenue streams largely dependent on the west. Foreign exchange is the biggest thing holding back Japanese stock prices at the moment and it won't be until the Euro and US dollar strengthen that we'll see a real boost to Japanese electronics makers.

Omega43565d ago

Either Amazon =/= World or Sony dropped the price knowing it would cause them to lose even more money. In fact it could be both.

anh_duong3565d ago

sony shares were rallying into the announcement and have sold off. most were expecting a slim. buy the rumor sell the fact. it is not like sony shares underperformed this year. sony shares have underperformed on the longer run (3yr horizon) but this year they have actually outperform nintendo. i.e. nintendo -30% YTD, -3% yesteday.

Guido3565d ago

You tell him Nintendo stock slides and yet they sell more than anybody int he console race and he will cling tot he idea that Sony stock took a slight drop over the last 12 days. Sorry, but you're wasting your time with him, he's a troll.

ultimolu3565d ago

...Let me make something clear to you dearest Omega. Are you listening? Do you have your listening caps on? Good, because I guarantee this will hurt your sensitive ears.


...Do you comprehend?

I sure hope so.

cyclindk3565d ago

Noooooooooooo! All my stock is worthless noooooooooowwwwwwwwww!!!

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