Sony raising money for PlayStation division with insurance unit IPO
Narrowly voting down a bake sale, Sony execs have elected to sell off shares of the company's insurance unit to raise funds for the struggling games division. The sale of roughly $2.9 billion of shares (34.5% of Sony Financial Holdings Inc.) will be Japan's largest IPO this year and some of the proceeds will be channeled to the PlayStation unit; and some will benefit the production of Bravia televisions.
As PlayStation 3 continues to lag behind Wii in sales, a renewed price drop seems obvious, but would also mean greater short-term losses for the games division. Money from the insurance unit IPO could help balance that loss, but the IPO faces its own challenge as investors are still shaken from losses in the subprime mortgage market. But would they have said "no" to a pile of gooey cupcakes and fudge-packed brownies? We'll never know.
