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Sony Sells All Its Square Enix Stock

C'mon, can you really blame them?

As reported by The Wall Street Journal, Sony will sell its entire stake in publisher Square Enix. Sony's position, totaling 9.52 million shares, will be sold to yield around 4.8 billion yen ($47 million).

Japanese brokerage firm SMBC Nikko Securities Inc. will oversee the transfer, and the deal is expected to close on April 17. This is part of Sony's plan to boost profitability and it sorta makes sense. Also, don't forget that at one point, Sony actually held 8.2 percent of Square Enix's total shares about a decade ago. Over the years, Sony's confidence in Square Enix has apparently waned...or maybe they just need the extra cash.

After the travesty that was Lightning Returns: Final Fantasy XIII, I probably would've sold my stock, too. That's all I'm saying.

Tags: sony, square enix, sony square enix stock, sony stock

4/16/2014 3:46:09 PM Ben Dutka

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Comments (18 posts)

Temjin001
Wednesday, April 16, 2014 @ 4:07:09 PM
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I can remember when Sony bought them shares back in the PSX days.

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comicozi
Wednesday, April 16, 2014 @ 4:07:34 PM
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Looks like sony finally realized that SE is done for.

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souljah92
Thursday, April 17, 2014 @ 9:17:06 PM

Indeed, this money should be put towards something worthwhile like a new Locoroco

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Lawless SXE
Wednesday, April 16, 2014 @ 4:33:06 PM
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Depending on the future of S-E, this could prove to be an immensely stupid short-term gain kind of plan. It could also be a very smart move...

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LimitedVertigo
Wednesday, April 16, 2014 @ 5:09:26 PM

Ya, I agree.

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shaytoon
Wednesday, April 16, 2014 @ 5:42:44 PM

would you kindly elaborate on the smart move

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Lawless SXE
Wednesday, April 16, 2014 @ 5:50:55 PM

The possibility that Square-Enix will continue to put out low-quality titles leading to an inevitable drop in profitability, to the point that they are forced into liquidation, therefore making shares in their company a wasted investment. Just to be clear, I don't think that that is likely at all, but to discredit the possibility entirely is folly.

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Akuma07
Wednesday, April 16, 2014 @ 10:16:50 PM

Well, Squeenix has had a decade to increase the quality of their games and increase profitiability, but they don't seem to understand how they are going to do that.

Sony would have lost confidence in them long ago, another important thing is that Squeenix used to be Sony exclusive, now they are multiplat.

So considering Squeenix is in a steady decline, and Sony doesn't benefit in any other way, I don't see any use for these shares. Squeenix have only just NOW as of like last week started to see the error in their ways, but that is just words, and they need to put those words into action if they are to regain our trust.

IF Squeenix return to prominence, and that's a huge IF, then it could have been a bad choice. But I don't really see that happening.

I think the only future Squeenix has is as a major publisher, but they need to work hard for that.

Last edited by Akuma07 on 4/16/2014 10:17:55 PM

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Underdog15
Thursday, April 17, 2014 @ 12:46:31 AM

If you want to know the health of a company, don't look at it's stock price (and thereby panic buy/sell... treat the stock market like a casino, and you get casino results). Look to it's dividend yield and payout consistency.

SE has not consistently paid out dividends, and when they do, it's near a piddly 1%-ish.

Sony Corp's profit strategy is to invest mostly in R&D and other companies that it could profit from in a loop. (for example, although they don't own bluray, they do receive some royalty. They would make money off SE buying blurays, then they make money of SE (theoretically). So the money they "lose" as part owners of SE, goes back to them.) They do this with SO SO many things. It's why they continue to be profitable despite as a standalone company (Sony outside Sony Corp.) post losses, yet still maintain a profit.

Sony relies on their investments to pay out dividends in order to receive income and fund other projects. There was a time when owning SE shares would compound their interests (not interest... interests.). They had many Square exclusives. So they make money on the Square side, then make money again on the Sony side. It's like double profit.

But... if they have shares that are inconsistent over a number of years, you have to evaluate if you can put your investment to something better. What we investors might call "Dividend Champions" (companies that pay out dividends without interruptions for at least 5 consecutive years). It's not likely a short term strategy, as they've held SE for years and years.

It's not like Sony is in the business of buying low and selling high as if they were a Wall Street hyena. They invest for moderate terms in order to compliment their business and earn more money.

Quite frankly, I think they're better off on something more reliable as well. (There was a time Square Enix was practically Blue Chip. If it said "Squaresoft" on the box, it would get purchased.)

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Lawless SXE
Thursday, April 17, 2014 @ 4:29:05 AM

Just so you know, Underdog, if ever I get the urge to invest in the stock market, I'm coming to you for advice.

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Underdog15
Thursday, April 17, 2014 @ 7:33:44 AM

haha thanks Lawless. I'm not a professional, by any means, though. And my investment style is extreeemely unexciting. I'm not a get rich quick guy. I just buy once a month... and something that is cheaper than normal and pays dividends... then I let it sit there and compound. Pretty unexciting. But it works, and if all goes well, I should be able to retire 10-15 years earlier than most people.

And I ain't rich. I work in social services. LOL! You don't work in that sector for money.

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LimitedVertigo
Wednesday, April 16, 2014 @ 5:09:18 PM
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Doesn't seem like the right time to sell.

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Underdog15
Thursday, April 17, 2014 @ 12:49:14 AM

If the price dips low and you still get dividends with some moderate consistency, that's when you get greedy. If they have year after year of interrupted dividends, which has been the case since the merger and the Spirits Within fiasco, and which SE relies on for part of it's profit margin, putting that cash towards another endeavor might be the best option.

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Knightzane
Wednesday, April 16, 2014 @ 6:30:26 PM
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I can't really blame Sony. Maybe they're a little upset over the loss of vs13 as an exclusive, which should SERIOUSLY be exclusive. Changing it to 15 was a ploy to make it go multiplatform and lets face it, Final Fantasy sells way more on the playstation than on xbox. SE as a company really is falling apart, even though they want to go back to how things were, its not going to happen quickly. Last gen they really screwed themselves hard and Sony is smart for bailing on them now, while they in the lead and making monies.

I want SE to succeed but I want Sony to succeed more. I have high hopes for 15 and kh3 but at this point, and with xbox ones VERY big power gap to the ps4, the games will end up like ff13.

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Banky A
Wednesday, April 16, 2014 @ 6:51:36 PM
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I'm really unsure about this move. I can't quite yet figure out the contingencies for Sony.

It doesn't feel amazing to constantly find out they need more money and to make cuts all over places.

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Geobaldi
Wednesday, April 16, 2014 @ 7:34:50 PM
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Actually, at the current market value, it's valued at around 16 billion yen (or $156 million) for the 8.25% stake that they sold. But Sony still has a long way to go to help recoup some of the over $1 billion they announced they were losing for the year back in February.

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___________
Thursday, April 17, 2014 @ 4:59:31 AM
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dunno if thats such a good idea though.
they get rid of the stock just before XIV releases, and not to mention KH3 and FFVXIII, after 10+ years in development, will FINALLY be coming out next year!
and they decide to get rid of the stock now, years after $E took a massive decline.
thats smart, hold onto the lows and when the highs have are appearing on the horizon they jump ship.

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WorldEndsWithMe
Saturday, April 19, 2014 @ 8:04:12 PM
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Good, they sold out Sony.

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