Investors Cheer as Toshiba Nears HD DVD Surrender
It seems that it is better to dump your format and cut your losses than to be the winner.
Reuters is reporting that Toshiba’s share price has risen 6% as analysts praised its move to cut its losses, while Sony Corp, whose technology is set to become the industry standard for high-definition home DVDs, rose only 2%.
"It doesn’t make sense for Toshiba to continue putting effort into this," said Koichi Ogawa, a chief portfolio manager at Daiwa SB Investments. "It needs to cut its losses and focus its resources on promising businesses."
Toshiba will likely suffer losses of hundreds of millions of dollars to scrap production of its equipment and other steps to withdraw from the business, Japanese public broadcaster NHK reported. But analysts gave high marks to Toshiba’s quick move to pull the plug on HD DVD just two years after launching its first players. It took Sony more than a decade to quit Betamax.
They seem to have forgotten that Toshiba also made Beta recorders – though perhaps they dropped that a lot sooner than Sony also…?