TOKYO: Sony Corp shares fell more than 10 percent on Thursday in their biggest drop in more than 10 months after the Japanese consumer electronics maker announced deep losses in its smartphone business and scrapped its dividend for the first time since it listed in 1958.
The surprise axing of the dividend abruptly ended a 6-week rally that had lifted Sony’s shares as much as 25 percent to their highest in more than a year, fuelled by rising confidence in the company’s restructuring and its plans for the automotive sensor business.
“If the company were to go through further restructuring, it needs cash, so from this perspective, it makes sense that the company is not paying dividends,” said Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management.
Akino reckoned Thursday’s slide in the stock price was overdone, but expected it to struggle until Sony gives more details on its restructuring when it announces its July-September results.
After the market close on Wednesday, Sony said it expects a 230 billion yen ($2.2 billion) net loss for the year ending on March 31, worse than its prior estimate of a 50 billion yen loss, reflecting an impairment charge for its smartphone division.
On Thursday morning, the shares tumbled to a 5-week low of 1,844 yen before managing a slight bounce to 1,914.5 yen, down 9.8 percent.