Major Sony Stockholder Suggests Splitting Up The Company
Sony hasn’t been sailing in easy waters lately. The company has desperately struggled to post a profit, which finally occurred this fiscal year. The last time Sony managed to post a profit was all the way back in 2008, forcing the massive electronics and entertainment house to lay off staff and sell prime office real estate. And this is why one of its major stockholders wants the company to split up.
Daniel S. Loeb, a hedge fund manager who owns 6.5% of Sony, has suggested that Sony be split in the middle, separating the Entertainment and Electronic practices of the company. This suggestion was made to Sony CEO Kaz Hirai in person, after Loeb visited Tokyo and delivered a letter to the Sony boss.
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Loeb currently owns shares worth $1.1 billion in Sony, making his opinions a little more than…well just an opinion. His plan would essentially have Sony “spin off part of its entertainment arm,” according to the article, which is comprised of three major pieces: Sony Music Entertainment, Sony Pictures Entertainment and Sony/ATV Music Publishing.
According to The Times, this is what Mr. Loeb had to say about his plan.
“Mr. Loeb said he believed that spinning off a portion of the entertainment business to Sony shareholders could sharpen the company’s focus and lead to higher profit margins, while helping to revive the core electronics business. He has also contemplated a spinoff or sale of other operations, including Sony’s insurance division, which accounted for much of the company’s profit last quarter.”
Listen, I’m no business guru, but this doesn’t sound like a bad idea to me. It’s been known for a while now that the majority of Sony’s profits come from its electronics sector, and when you’re facing financial difficulty it just makes it easier to cu the strings that weigh you down.
But then again, I could be completely wrong and not know it. What are your opinions on a possible Sony splitting?