Sony To Raise $4 Billion USD; Invest All Of Them In Camera Sensors
Despite the fact that Japanese tech company Sony has a commanding lead in the smartphone camera sensor market share, the firm has been facing a difficult time when the growth of its smartphone business is concerned. Since Sony is well known to manufacturers for its dexterity in smartphone camera sensor tech, the company will be taking advantage of this by issuing new shares in approximately 26 years. With this move, the company plans on increasing the amount of capital it needs in order to dig deep in to camera sensor technology.
Sony Expects To Raise $2.62 Billion From A Public Stock Offering, Followed By A Further $1.38 Billion
According to Yahoo Finance, the amount of money that is going to be raised by the company is equivalent to 10 percent of the company’s total value. However, it can clearly be seen that the company’s CEO, Kazuo Hirai, is giving the camera sensor business the highest priority in order to steer Sony in to calmer waters. The company has failed to gain a significant market share in mobile devices due to being hammered by large corporations such as Apple and Samsung, along with Chinese smartphone makers that price their products at a very affordable range.
The company said in a statement that:
“In addition to securing funds for active and concentrated investment in businesses that are driving growth. Sony ... aims to secure its ability to make future further investment.”
While investors fear that the new stock will dilute per-share earnings, the company’s market value has actually doubled, and it was reported in June 2014, that the company was worth $35 billion.
According to Takatoshi Itoshima, who is the Chief Portfolio Manager Commons Asset Management states that:
“It's positive that it is investing in the sensor business which is seen promising. But short-term investors may question the strength of its balance sheet, or wonder whether the company could've slashed more of its businesses before raising money from the market.”
Right now, demand for camera sensors is so high that Sony is unable to meet the quota. That being said, Tomoyuki Suzuki, who is the head of Sony's device solutions business, has stated that he expected sensor sales to grow by nearly a quarter to 550 billion yen in the year ending March.
Additionally, the company has also not been performing in the TV business, and is expected to lose around 6 percent of this particular business. Despite its losses, Sony is aiming for the heavens and with the amount of investment that it will be able to accumulate, we expect the company to bring about new camera sensor tech sporting new image and video capturing prowess in the near future.
Image source: Xperia Z1 Overview Waterproof