Sony has lost yet more price on its shares, but this is not the end of the movie.
The latest hack attack on Sony leaves the Japanese entertainment company in a vulnerable position. The legal claims could come from employees, actors and business partners, and even from the North Korean government as they are being blamed. However, US law enforcement and military bodies are giving their all to finding the perpetrators and alongside Sony are attempting to plug the leaks. This means that Sony is not alone in bearing the cost of the actual hack, even if the lawyers are having a field-day in substantiating claims against the company.
In the meantime, Sony is still selling with discounts on assets and sales, in an attempt to halt the falling price, down 26% over the last five years. It has two money-making divisions, the videogame division and the Sony Pictures unit. Sony Pictures has forecast a boost in annual sales to as much as $11 billion in 2018 from the current $8.1 billion.
Sony pictures intend to take full advantage of box office sales on the film ‘The Interview’, which tells the comedic story of a CIA plot to assassinate North Korean dictator, Kim Jong-un. The offence caused to Kim Jong-un has led many to blame North Korea for the hack, despite protests from the country that they are not involved. ‘The Interview’ opens in cinemas on 25 December.
This is not the first hacking incident for Sony as in 2011 information on customers was targeted from Sony’s online-entertainment service and the company was criticized by US lawmakers. Whilst the Sony PlayStation network was attacked three years ago by a group called Lulz Security.
Sony’s share price is also susceptible to the weakening yen as the corporation relies on foreign exports and with the Japanese yen having taken a hit of 20 points against the US dollar over the last 5 months, Sony has gained ground. Global stocks however have taken Sony down over the last week with the yen gaining strength. By Dana Blankenhorn’s calculations in his report from Seeking Alpha, “7,767,266 million yen in annual revenue still comes to $64.727 billion, even at an exchange rate of 120 yen to the dollar. The company's stock has a valuation of $25.29 billion, meanwhile, so you're paying just 40 cents for each dollar of sales.”
MT4 chart: Sony
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