Sony Climbs on News of Dubai Investment; PS3 Tops Wii

Sony gained 4.6% to ¥5,500 in Tokyo following news a $2B fund of Dubai International Capital [DIC], a $13B investment company owned by the emirate's ruler, made a "substantial" investment in Sony. Neither party disclosed details of the size of the deal, but it is expected to be no more than a 5% stake, since an amount above that level requires disclosure with the Tokyo Stock Exchange. Bloomberg reports DIC said it planned a $500M investment in a Japanese company last week. In a statement, DIC said it invested in Sony because of management's "ongoing strategy of focusing on capital efficiency and cash generation." Sony Chairman Howard Stringer commented, "We are happy that DIC has recognized the strength of the Sony brand as well as our unique competitive advantage in having both entertainment and electronics assets to drive our businesses forward." At present, U.S. mutual fund Dodge & Cox is Sony's largest shareholder with an 8.3% stake, per Sony's annual filing in June with the SEC. An asset manager at Yasuda AM called DIC's investment "encouraging" for Japanese stocks. Separately, Sony's shares were also supported by a report from Enterbrain, Japan's leading game magazine publisher, that showed the PlayStation 3 topped Nintendo's Wii in weekly sales for the first time ever during the weeks ended Nov. 11 and Nov. 18. The recently introduced 40-gigabyte model is said to have driven sales. Although the PS3 is poised to outsell Wii in November, it still trails far behind the Wii and Microsoft's Xbox 360 year-to-date. Sony's ADRs gained 3.7% to $49.09 on Friday.

Sources: Press release, Bloomberg, Wall Street Journal I, II
Commentary: Sony's Game Division Losses More than Double • Sony's Not Ready To Retire PS2 Just Yet • Sony to Sell PS3 Chip Unit to Toshiba; Drops U.S. PS3 Price by $100
Stocks to watch: SNE, NTDOY.PK, MSFT. ETFs: EWJ, ADRA, ITF
Earnings call transcript: Sony F2Q07

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