Cash-ravenous Sony will flog Manhattan HQ for $1.1 BEELLION
Something the Japanese biz will actually make a profit on
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Sony is ready to flog its sky-scraping US HQ in Manhattan for $1.1bn to get hold of some much-needed cash.
After debts on the building have been settled up, the entertainment giant expects to walk away with $770m - that's $685m more than it paid for it in 2002. However, by way of comparison, the firm recorded a $5.7bn net loss for its last fiscal year.
"Sony is undertaking a range of initiatives to strengthen its financial foundation and business competitiveness and for future growth," the company said in a canned statement.
"At the same time, Sony is balancing cash inflows and outflows while working to improve its cash flow by carefully selecting investments, selling assets and strengthening control of working capital such as inventory.
"This sale is made as a part of such initiatives."
Sony and its businesses, including the music and movies divisions, will stay in the Madison Avenue skyscraper for up to three years in a leaseback agreement with the buyers, a consortium led by real-estate biz The Chetrit Group.
The Japanese giant said it expected the deal to be done by March this year and it would rejig the numbers in its fiscal year forecast to take the sale into account.
Sony has lost money every year for the past four years as it failed to make an impact in the mobile devices market while its PlayStations remained in hot competition with Xbox and Wii consoles; its handheld gaming gear didn't make the splash the firm was hoping for, either.
Like many other older tech firms, Sony has started restructuring itself to focus on more profitable markets. So far, the company has sold off its chemical subsidiary and cut thousands of jobs. ®
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COMMENTS
Unfortunately the building is not compatible
Naturally Sony's former headquarters is incompatible with the surrounding infrastructure, traditional phone, power and water systems, and traditional office furniture. The IT infrastructure is locked down in such a way that the buyer can take possession but only Sony can truly control it. As such it will be marginably habitable but to get full advantage of their purchase the buyer will have to throw the building away and buy a new generic building from another vendor.
Re: Am i reading this correctly?
High prices seem to be the norm. The US stock and bond markets are at, or near, all-time highs. Agricultural land in the US is at all time highs. The Contemporary Art market in New York is booming with record sales and high prices. The real estate markets in Manhattan and Washington, DC, are both at all-time highs as the Austrians would predict. That is, after all, where the money is being created, and the place where much of it is injected into the economy.
This doesn’t even consider what prices would be like if the Fed and world central banks had not acted as they did. Housing prices would be lower, commodity prices would be lower, CPI and PPI would be running negative. Low-income families would have seen a surge in their standard of living. Savers would get a decent return on their savings.
Of course, the stock market and the bond market would also see significantly lower prices. Bank stocks would collapse and the bad banks would close. Finance, hedge funds, and investment banks would have collapsed. Manhattan real estate would be in the tank. The market for fund managers, hedge fund operators, and bankers would evaporate.
In other words, what the Fed chose to do ended up making the rich, richer and the poor, poorer. If they had not embarked on the most extreme and unorthodox monetary policy in memory, the poor would have experienced a relative rise in their standard of living and the rich would have experienced a collective decrease in their standard of living.
No.
> on the balance sheet the real difference between an investment and an asset
The balance sheet has assets ["stuff"] on one side and liabilities/equity ["whom the stuff belongs to"] on the other side. Hopefully most of the stuff on any side is an investment for someone.
> Put another way one side is the stuff that makes money and the other side is the stuff that takes money
That's not how a balance sheet works, hon.
> A corporate HQ is just like your house and it shouldn't be placed on the asset side
Being an asset means it will be placed on the asset side otherwise the good ole governement will whip your arse for tax evasion
For the remainder of the problem, see "fair and prudent evaluation", "deprecation" and "write-offs".
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