Tuesday, June 12, 2007

EXPENDITURE STRATEGY - MATSUSHITA ELECTRIC

Matsushita Electric Industrial Co. may sell its 52.4 percent stake in Victor Co. of Japan Ltd., maker of the JVC brand of electronics and creator of the world's first home video recorder with the VHS format in 1976

Because:
1. Victor forecasts a fourth straight year of losses.
2. Victor had about $1 billion in debt as of March 31 (Victor may issue 20 billion yen ($164 million) of new stock to repay debt)

Matsushita may not sell to any party keen to sell off Victor’s money-losing units quickly

Expenses that do not generate a benefit do not need the benefit of any doubt.

[Click here for full story at: BLOOMBERG.COM]

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