New York Times damages Sega’s stock
Financial speculation about Sega's future causes stock volatility
One of the biggest and most respected broadsheet newspapers in the world is the New York Times and lately they have been reporting some disturbing news about Sega. We ourselves have reported the difficulty Sega has faced over the last four years. The company has posted financial losses for four years consecutively and it is only recently that their fortunes have turned. The Dreamcast is a great piece of hardware and is backed up by quality software and a competitive price. Sega are currently considering leaving the hardware market and concentrate on producing software. They believe that the loss making hardware market is costing them too much money and developing on-line networks and software is the way to go.
The New York Times recently published a story stating that Nintendo was in negotiation to purchase Sega and all of their property for two billion dollars. This story was unsubstantiated and both Sega and Nintendo have flatly denied it. Sega has even written a letter to the New York Times demanding an apology. Sega claims the article is harassment and an obstruction of their business. After the article was published Sega’s stock was suspended and their shareholders were dismayed. Even though the story may be untrue the damage to the company had already been done.
The following is a brief extract from the letter that Sega wrote to the New York Times. “While Sega has always been fond of The New York Times' objective coverage of our company, we would like to express our concern over the fallacy that appeared on 12/27/00 regarding Nintendo's buy out of Sega. Not only did this erroneous allegation cause the trade of Sega's corporate stock to be temporarily suspended while substantially influencing Sega and Nintendo's stock prices, it caused unnecessary confusion among stockholders, affiliated companies, business partners, and end-users of both companies. It also severely damaged Sega's corporate and brand image during a very precarious time in the videogame industry.”
Sega might be intending to leave the hardware market but they do not need the media making speculations to their business and damaging their stock price. Rumours are also circulating that Microsoft are interested in purchasing Sega for themselves. Microsoft will have the best hardware available and they need the best games. The future is looking interesting.
The New York Times recently published a story stating that Nintendo was in negotiation to purchase Sega and all of their property for two billion dollars. This story was unsubstantiated and both Sega and Nintendo have flatly denied it. Sega has even written a letter to the New York Times demanding an apology. Sega claims the article is harassment and an obstruction of their business. After the article was published Sega’s stock was suspended and their shareholders were dismayed. Even though the story may be untrue the damage to the company had already been done.
The following is a brief extract from the letter that Sega wrote to the New York Times. “While Sega has always been fond of The New York Times' objective coverage of our company, we would like to express our concern over the fallacy that appeared on 12/27/00 regarding Nintendo's buy out of Sega. Not only did this erroneous allegation cause the trade of Sega's corporate stock to be temporarily suspended while substantially influencing Sega and Nintendo's stock prices, it caused unnecessary confusion among stockholders, affiliated companies, business partners, and end-users of both companies. It also severely damaged Sega's corporate and brand image during a very precarious time in the videogame industry.”
Sega might be intending to leave the hardware market but they do not need the media making speculations to their business and damaging their stock price. Rumours are also circulating that Microsoft are interested in purchasing Sega for themselves. Microsoft will have the best hardware available and they need the best games. The future is looking interesting.
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