Sony Will Raise $2.9B in IPO, Poised for PS3 Price Drop

September 4, 2007 5:12 PM

Tokyo-based Sony Corp. will net $2.9 billion when it sells 34.5 percent of Sony Financial Holdings Inc. October 11 in the Japan's biggest initial public offering of 2007. Sony Financial Holdings, a consolidated subsidiary of Sony Corp., is the company's insurance unit formed in 2004.

The company will sell 725,000 shares and offer an additional 75,000. Bloomberg spoke with analysts who speculated the move was meant to raise funds for the currently unprofitable game division and consumer electronics division.

Mitsuhiro Osawa, a Tokyo-based analyst at Mizuho Investors Securities Co., told Bloomberg the increased assets could allow Sony to pursue additional PlayStation 3 price cuts. The strategy could help Sony move more units in Japan, where the PS3 is being outsold 3-to-1 by the Wii.

Carlos Bergfeld

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manlyman

 reply
September 4, 2007 5:16 PM

Is this a good thing or a bad thing?
- aodeasykill
  
   reply
  September 4, 2007 5:23 PM
  
  It's good if you want the possibility of a cheaper PS3. Most likely bad for stock prices and investores.
  - oneshot
    
     reply
    September 4, 2007 5:30 PM
    
    Most likely it wont be bad for stock prices or ivestores, it would be kinda point less if this was the case.
    - edgewise
      
       reply
      September 4, 2007 9:53 PM
      
      I think it'd be bad for current shareholders of Sony, or at least whoever holds shares of their insurance branch.
      - Tissen
        
         reply
        September 4, 2007 11:32 PM
        
        It's an IPO, so the only current shareholders are all on the inside, in one way or another.
- geedeck
  
   reply
  September 4, 2007 5:30 PM
  
  It will help Sony and give it some capital to breath/plan. Helps make the price drop possible by making the PS3 more competitive sooner, possibly giving it a chance to meet the 360's momentum in the US and stop letting Nintendo have run of Japan.
- Beady
  
   reply
  September 5, 2007 12:08 AM
  
  Good in that it may mean the PS3 gets a price drop
  
  Bad for Sony though, as dropping the price will cost them a significant chunk of change and quickly absorb a wad of the money they get from this IPO. But if they dont do it, they have no chance in the console war (at least in the shortish term)