Sharp shares tank as losses grow

Published:  16 Aug at 11 AM

Sharp, the Japanese electronics manufacturer, has seen the value of its stock drop to a 37-year low as analysts fear the firm’s financial losses will grow. Sharp has predicted that its full-year losses will total 100 billion yen.

However Goldman Sachs has forecasted that the figure will be closer to 150 billion yen. Deutsche Securities estimates that operating losses will be 159 billion yen and has downgraded the company’s stock from hold to sell.

Shares in Sharp are now worth 169 yen each which represents a loss of 12.4 per cent following the downgrade. Since announcing its first-quarter financial results earlier in August Sharp has lost around £956 million in market value.

In an attempt to cut costs, Sharp has said that it will be reducing its workforce by 5,000. It is likely that Sharp will have to come up with other ways of restructuring its business if it is going to be able to obtain new loans from creditors including Mitsubishi UFJ and Mizuho Financial.

The firm is also looking to renegotiate plans for a tie-up with Hon Hai Precision Industries, the Taiwanese electronics group. Sharp has been suffering from a lack of demand for its main product LCD televisions. It is also feeling increased competition from rival firms including Samsung.