Should Sony Listen to Calls to Split the Company This Time?

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As the activist investor Daniel Loeb changes his tune on film and TV studios, he urges the Japanese conglomerate to spin off assets and focus on building a 'New Sony' with its 'undervalued' content business at the center.

Investor Dan Loeb , is floating a 102-page document calling for Sony CEO Kenichiro Yoshida to separate the company’s assets.

It's not entirely deja vu, though. Last time, Third Point encouraged the Japanese conglomerate to jettison its "bloated" entertainment assets, but now it is bullish on that business and wants it to be the focus of a "New Sony." In Third Point's public presentation, Loeb praises Sony CEO Kenichiro Yoshida for a "dramatic transformation" at the company he has led since April 2018, then advises him to spin off Sony's strong semiconductor business and list it in Japan where it could be worth $35 billion in five years, while Sony's entire market cap on the New York Stock Exchange is at $63 billion.

Still, some may argue that Loeb might have been better off simply staying put with the Sony stock he purchased for about $20 a share in August 2013; its value would have risen 160 percent. Nevertheless, Third Point argues that Sony remains "one of the cheapest large cap stocks globally."

 

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