Sony stock downgraded to “junk” status

Sony has really been struggling this year, with TV sales tanking, PS3 sales slowing down and the PS Vita struggling to gain traction in the handheld market, being overshadowed by the price-cut Nintendo 3DS.

Now things have gotten really bad, with stock rating company Fitch downgrading Sony’s stock to a BB-minus rating, known in the industry as “junk”. Earlier this month Moody also downgraded the stock, although not as low as “junk” status.

Junk isn’t an official label, but is used in the industry to refer to stock of BB status or below with high risk of default and a slim chance of short/medium term gains.

The ratings group made the following statement: “[The move] reflects Fitch’s belief that meaningful recovery will be slow, given the company’s loss of technology leadership in key products, high competition, weak economic conditions in developed markets and the strong yen.”

The company’s struggles were part of the reason former Playstation boss Kaz Hirai was elevated to CEO and president. He hopes to use a strategy of uniting Sony’s departments to consolidate the profitable markets and create strategies to combat losses in the area where the company is struggling, such as televisions.

However it would appear that Hirai’s strategy hasn’t yet come to fruition, as the company’s quarterly financial reports show a downward trend for Sony’s core markets, including the gaming side.