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Sony Bets Its Future On PlayStation II Console?

Posted by Roblimo on from the corporate-high-rollers dept.

max_cool writes "Sony has announced that it is splitting its stock in preparation for a strong PS2 release. This could make many people very wealthy or destroy the company. Daily Radar has a full report on Sony's strategy and why they think it will succeed."

5 of 330 comments (clear)

  1. Risky? Hrm... by betaray · · Score: 4

    I don't understand why anyone would possibly think that this is a risky manuver other than because Sony told them it was. Stocks split all the time. Sony is currently weighing in at 270. Stocks constantly split as they approach the 300 range. This is an awesome marketing ploy if they can convince everyone that they are willing to bet the entire company on this new system. In reality however, if the PS2 flops, stock split or not, sony is still going to be in business. They are far too diversified to let one product destroy them.

  2. Understanding the Stock Market... by Super_Frosty · · Score: 4

    It's obvious to me that Roblimo has a zero percent understanding of the stockmarket. The reason a stock splits is to lower the price of the stock so that people can afford to buy more shares. This happens approximately EVERY DAY in the stock market. Yahoo! has split about fifty times. Splitting a stock just drives up the price of a stock again by making it more attractive to low budget investors. It's not risky at all, and it certainly can't destroy a company. Notice how the article didn't explain how a split could possibly be risky! It basically raved about Sony. Sony is just making it easier to buy shares, and the hype is giving the split a lot of attention.

    I guess Roblimo must've bought into Sony hyper hook, line, and sinker.

    --
    No comment at this time
  3. Sigh. by spiral · · Score: 4
    Chances are this has absolutely nothing to do with the PSII. A quick bit of research shows that Sony stock has been climbing steadily from ~65 to ~270 over the past year (over 300% gain...wish I owned some!).


    $270 per share is generally considered "high", so the stock is split. Theoretically a split has no effect on the company's value (2*135 == 1*270); in practice this tactic increases the volume of trading and usually creates the illusion of increased value.

    --
    Drinking will help us plan!
  4. Agree: It's bullshit by Ungrounded+Lightning · · Score: 4
    I have no idea where the author of the article got the idea that there was something risky about the stock split - unless it was some hype from the marketing department of Sony.

    Stocks are split when they get too expensive, so that smaller players can buy in more easily

    At $270 it costs $27,000 to buy a hundred shares - the "round lot" quantum on the markets, below which you are typically penalized with higher transaction fees. Splitting, say, 3-for-1 brings the stock price down to 90 and the ante down to $9,000. Many more players can buy in. Typically they do, and bid the price up a bit, which is why stocks typically climb just after a split. (And larger players take advantage of that by buying on news that the stock is going to split - which also bids the stock up a little before the split.)

    $270 is way high, so a split is overdue. The split will almost certainly result in the stock going up. If the marketing droids can convince some fools that there is some risk to this and doing it is "daring", said fools will interpret the rise as a success for Sony.

    As for any real risk from the move, the only one I can see is a psychological hit if the stock ends up trading at a very low number. But if they don't split it beyond 3-for-1 they'd have to lose half their value after the split to drop below even 45. If the stock value drops by 50% they have some other problem - big time.

    --
    Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
  5. Trusting Slashdot Readers by Roblimo · · Score: 4
    Or I might just throw a link to the story out there so that all you mighty brains can pick it to pieces. I know as well as any other half-bright middle-aged American what a stock split does and doesn't mean, and I know that gaming products represent only a fraction of Sony's product line, but a news source that is read as near-gospel by many gamers reported Sony's stock split as a risky move, and took it as a vote of confidence in a game product.

    Enjoy the irony! And please note that many Slashdot readers have debunked that hype for those who *don't* know that a stock split is a ho-hum financial maneuver for companies whose share prices have put round lots (100 shares) out of reach of the very small-time investors who are most susceptible to hype.

    More and more, before posting a story like the one above, instead of adding my own words to it I find myself thinking, "Fifty others will say exactly what I would anyway, so why not let them?"

    Slashdot has some amazingly bright readers. The debunking always gets done, one way or another, whether by me or by you.

    - Robin

    PS - remember the Jesux "Christian Linux" hoax that took in ZDNet and Wired a while back, but got exposed here? I had a pleasant IRC conversation with Pudge, the perpetrator, earlier today. Real nice guy.

    (I'm often on #slashdot at irc.slashnet.org if you want to continue this discussion, BTW.)