Business

Sony Stock Gains for the First Time After Announcement of Share Buyback

On Friday, Sony Corporation for the first time announced a share buyback worth 100 billion yen (approximately $90 million) which benefited its stock to recover from the shock it received at the beginning of the week when the technology company published its grey earnings.

During this week, it was the second significant buyback of Japan that was marked after the announcement when the technology investor SoftBank Group Corp on Wednesday mentioned that it is going to buy around 600 billion yen worth of stock which send its share prices high.

Before the announcements, both stocks were under pressure which was considering the investor’s concern over the outlook regarding the global technology industry due to the downfall of demand in China.

There is an improvement in our financial condition, and that is sufficient for us to manage the repurchase, spokesman of Sony stated, further adding that the latest share prices were also the reason for the decision.

Senior Analyst Hiroyasu Nishikawa at IwaiCosmo Securities informed that the buyback reflected how much Sony has transformed over the years while replying to the shareholders.

Few years before, Sony was battling with huge losses due to loss of market share to Asian competitor of its consumer electronics business. From then onwards, Sony has redesigned itself as an entertainment company along with consistent revenue especially from the gaming industry and from music content.

This week the shares of Sony dropped by 14 percent which is the lowest in more than a year since the time the company announced a lower profit than expectation because of the collapse of its pervious successful gaming business, although due to its one-time gain to its EMI achievements has forced the results of quarterly to a record high.

The profit outlook for its imaging sensors is also dropped down by Sony, reasoning due to failing global smartphone market.

Due to increasing calls for higher shareholder return, the Japanese companies are thinking of increasing share repurchase. While in the last week Yamaha Corp, the maker of the instrument and Itochu Corp the trading house also declared buybacks in addition to their quarterly earnings.

The shareholder returns have been increased regularly by Sony via higher dividends over the recent years. 7.09 percent of Sony’s profit was paid in-terms of dividend during the last fiscal year, in comparison to 22.5 percent at U.S tech giant Apple Inc.

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