SONY IS DOOOOOOMMMMED.
Nah, just sort of kidding. Based on Sony's continued losses with the Playstation division, and the company as a whole projected to make an annual loss of $1.6 Billion dollars (Â¥90 billion), S&P has decided to place a negative credit watch on Sony's A- credit rating.
While this has no immediate impact on Sony, it implies there is a credit downgrade down the road should losses continue without signs of improvement. A credit downgrade would increase the cost of future borrowing for Sony and renewal of current debts. As of
March 31 2011, Sony as a whole owes $12 Billion dollars backed by $43 Billion dollars in capital paying $294 million dollars to service the interest.
Sony could maintain the status quo for atleast decade before potentially entering a bad earnings/debt downgrade/stock holder revolt death spiral. But well before that would happen, Sony would spin off division(s), sell more stock, fire workers, sell assest, so bankruptcy is not on the table even in the long term unless the company goes of a cliff.