More bad news for Sony Corp. , and more bad news for Sony investors: Immediately after the technology company tried to invigorate its reputation with the announcement of two tablet computers to compete against Apple Inc.'s iPad, it announced that in mid-April a hacker stole account information from its PlayStation Network, which has about 75 million accounts.
Sony's stock fell 2.8 per cent in New York on Wednesday after investors began to digest the implications, and you can see why. As Paul Kedrosky explains on Bloomberg: "I'm hard-pressed to see how Sony's security lapse on its PlayStation network is not among the worst such debacles in modern financial/technical history," he said. "Even the banks haven't managed to mess up this monumentally."
Thing is, this is just the latest event to hit Sony recently. Japan's devastating earthquake and tsunami in March disrupted supplies. Plus, the financial crisis and recession dealt a mighty blow to the company's earnings and revenues. Revenues slid from 4.5-billion yen in 2008 to just 2.9-billion yen in 2010.
And perhaps most devastating of all is the rise of formidable competition from the likes of television manufacturers, game console makers and the rise of the tablet computer.
Sony's American Depositary Receipts trading in New York have fallen nearly 30 per cent from their post-recovery high early in 2010. And, the ADRs are down more than 50 per cent from their pre-recession highs in 2007. Indeed, they now trade at a price seen in 2003.