It’s not a very Happy Thanksgiving for Sony execs around America today. Because the ratings agency Fitch downgraded parent Sony’s debt rating to ‘junk’ status. The reason? Weakness in its consumer electronics and TV operations because of the superiority of Apple and Samsung products. (Fellow Japanese tech giant Panasonic also was axed.) This is despite Fitching noting Sony’s “relatively stable” motion picture and music units. The downgrade sent Sony shares tumbling 4.4% in Frankfurt today. And yet Sony stock already has been trading near a 32-year low. Sony’s share price is down 40% so far this year. And this month Sony recorded its 7th straight quarterly loss.
According to news reports, Fitch downgraded Sony by three notches to BB-minus from BBB- minus, saying meaningful recovery will be slow. The move came after Sony last week announced plans to raise 150 billion yen ($1.82 billion) through the sale of convertible bonds. However, despite Fitch’s action today, twoof the three major ratings agencies still consider Sony investment grade so institutional investors may not be too spooked.