28 August, 2006

Mixed News For Sony

Sony furthers its losses, this time with a battery recall 1.8 million Apple laptops, for a total of 4.8 million batteries. At a cost from $170 to $250 million for their battery problems, I do not think a 2% loss in shares is that much. Interestingly enough, if you look at Sony's stock over the last 12 months in comparison to the NYSE, they are not doing so bad. I plotted closing stock price and trade volume for some of more notable Sony announcements over since the Rootkit problem reported on October 31, 2005. I looked at the day before, the day of, and the day after each announcement.

With all the bad things going for Sony, perhaps their recent $65 million purchase of Grouper is good news. Robert Cringely thinks so. Mr. Cringely, in his "i, cringely" column talks about how Sony can use this purchase to learn how to play in the new video era. At number 8 in volume, 1% of video traffic, I think this could be another loss for Sony. How many people have even heard of Grouper? With the popularity of YouTube and Google Video, and other players such as AOL, Yahoo! and Microsoft, Grouper could move up two notches and still fall off the map.

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