Sony Group Plunges 3.26% Amid Tariff Warnings and Legal Storms – What’s Next for the Tech Giant?

Summary
• Sony Group (SONY) slumps 3.26% intraday to $24.36, its lowest since January 2024.
• The company warns of reduced annual profit due to U.S. tariffs, while a lawsuit from Los Lobos over royalty disputes adds pressure.
• AFEELA 1’s January 22 NAMM Show debut and My Sony Care+ expansion in Hong Kong offer limited near-term relief.

Today’s sharp selloff in Sony Group reflects a confluence of profit warnings, legal risks, and sector headwinds. With the stock trading near its 52-week low of $20.42, investors are recalibrating expectations as U.S. tariff pressures and litigation risks weigh on sentiment. The intraday range of $24.29–$24.50 underscores fragile momentum.

Tariff Warnings and Legal Disputes Trigger Sell-Off
Sony’s 3.26% intraday decline is driven by two critical catalysts: a profit cut due to U.S. tariffs and a lawsuit from Los Lobos. The company’s profit warning, announced earlier this week, cited rising costs from U.S. import duties, directly impacting its consumer electronics and automotive segments. Meanwhile, the Los Lobos lawsuit alleges underpayment of global royalties for their work on Sony’s 'La Bamba' and 'Desperado' soundtracks, with claims exceeding $1.5 million. These developments have triggered profit-taking and risk-off sentiment, particularly as the stock trades near its 52-week low.

Automotive Sector Mixed as Tesla Trails SONY’s Decline
The broader automotive sector remains fragmented, with Tesla (TSLA) down 0.45% despite its dominance in EV innovation. While SONY’s decline is tied to specific corporate risks, the sector’s cautious tone reflects broader macroeconomic concerns. However, SONY’s 3.26% drop outpaces the sector’s average, highlighting its vulnerability to litigation and regulatory pressures.

Bearish Setup: Deep Puts and ETFs for Short-Term Volatility
• MACD: -0.621 (bearish divergence), RSI: 45.8 (oversold), Bollinger Bands: $24.79–$26.69 (price near lower band)
• 200-day MA: $26.62 (price below), 30-day MA: $26.51 (bearish trend confirmed)

The technicals confirm a short-term bearish bias, with SONY trading near its 52-week low and key support levels. The RSI at 45.8 suggests oversold conditions, but without a clear reversal signal, the risk remains on the downside. The MACD histogram’s negative expansion and price proximity to the lower Bollinger Band reinforce this view.

Top Options Picks:
• SONY20260116P22
- Type: Put, Strike: $22, Exp: 2026-01-16
- IV: 74.18% (high volatility), Leverage: 121.82% (high), Delta: -0.0871 (moderate sensitivity), Theta: -0.0176 (slow decay), Gamma: 0.0838 (responsive to price moves)
- Payoff (5% down): $2.32 (max(0, 24.360.95 - 22))
- This deep out-of-the-money put offers high leverage and gamma, ideal for a 5% downside scenario. The moderate delta ensures it gains value as the stock drops, while the high IV reflects market uncertainty.
• SONY20260116P22.5
- Type: Put, Strike: $22.5, Exp: 2026-01-16
- IV: 59.75% (moderate), Leverage: 203.04% (very high), Delta: -0.0950 (moderate), Theta: -0.0107 (slow decay), Gamma: 0.1109 (high sensitivity)
- Payoff (5% down): $1.82 (max(0, 24.360.95 - 22.5))
- This contract balances high leverage with reasonable IV, making it a potent play for a 5% drop. The high gamma ensures rapid value appreciation if the stock breaks below $23.50.

Action: Aggressive bears should prioritize SONY20260116P22.5 for its high leverage and gamma. A 5% drop would yield a 8.1% return on the put, while a breakdown below $23.50 could trigger a gamma-driven acceleration.

Backtest Sony Group Stock Performance
The backtest of Sony's (SONY) performance after an intraday plunge of -3% from 2022 to the present shows favorable short-to-medium-term gains. The 3-Day win rate is 50.77%, the 10-Day win rate is 56.15%, and the 30-Day win rate is 53.59%, indicating a higher probability of positive returns in the immediate aftermath of the plunge. The maximum return during the backtest period was 4.82%, which occurred on day 59, suggesting that while there is some volatility, Sony can recover and even exceed its pre-plunge levels.

Urgent Watch: SONY’s $23.50 Breakdown Could Spark Short-Side Frenzy
The immediate outlook for SONY hinges on its ability to stabilize near $24.36 and avoid a breakdown below $23.50, where the 30-day moving average and key support levels congregate. A sustained move below $23.50 would validate a deeper bearish trend, potentially accelerating the stock toward its 52-week low. Investors should monitor the AFEELA 1 NAMM Show debut on January 22 for any positive catalysts, but the near-term risks remain tilted downward. With Tesla (TSLA) down 0.45%, sector-wide caution persists. For those positioning for further declines, the SONY20260116P22.5 put offers a high-leverage, high-gamma play on a 5% downside scenario. Act now: If $23.50 breaks, initiate the SONY20260116P22.5 put for aggressive short-side exposure.