Investors in Japanese tech giant Sony have massively sold the stock after the firm said it would raise fresh capital by issuing new shares. It is the first time in 26 years that Sony seeks funding through share markets.
Shares in Sony closed 8.25 percent lower at the Tokyo Stock Exchange on Tuesday after the Japanese technology giant announced plans to raise 441 billion yen ($3.6 billion, 3.2 billion euros) through stock and bond sales.
Investors fear the shares sale will dilute the value of existing stock in the Japan's electronics leader because the capital hike will amount to about 10 percent of the company's current market capitalizations.
Sony's first new share issuance in 26 years was intended to finance the development and production of new products such as image sensors for cameras, the company said. In addition, the company was planning to pay back debt.
Of the 441 billion yen, 321.5 billion yen will be procured through new issuance and a secondary offering of shares in Japan and overseas. Another 119.9 billion yen are to be raised through corporate bonds that can be converted into stocks.
Hirokazu Kabeya, senior strategist at Daiwa Securities, described the size of the financing as "unusual," adding that it was "only natural" that the stock slumped so dramatically on the expected dilution. Latest developments in the Greek debt crisis had also played a role in the decline.
"The timing wasn't good as the market was already roiled over the Greek problem," he told the news agency AFP.
Sony sales have been hit by the advent of next generation electronics devices such as smartphones and tablet PCs which caused the former world market leader to write losses in six of the past seven fiscal years. Sony Chief Executive Kazuo Hirai has launched a sweeping restructuring drive in hopes to secure a profit of about 140 million yen in the current fiscal year ending March 2016.
uhe/bk (dpa, AFP)