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Sony's largest investor calls for partial sale of Sony Entertainment

This is a discussion on Sony's largest investor calls for partial sale of Sony Entertainment within the General PS3 Discussion forum, part of the Everything PlayStation; Sony's largest investor calls for partial sale of Sony Entertainment | Polygon Dan Loeb, CEO of Sony Corporation's "largest owner" ...

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    Sony's largest investor calls for partial sale of Sony Entertainment

    Sony's largest investor calls for partial sale of Sony Entertainment | Polygon

    Dan Loeb, CEO of Sony Corporation's "largest owner" Third Point LLC, called for the company to sell as much as 20 percent of the Sony Entertainment division to increase performance in a letter today written to Sony president and CEO Kazuo Hirai.

    Third Point LLC and the entities that it manages holds $1.1 billion in Sony stock, about 64 million shares. The hedge fund provides pooled investment services worldwide, and its proposal would have Sony offer 15-20 percent of Sony Entertainment to current shareholders as a means to incentive performance and increase profit margins.

    "Sony Electronics has suffered frustrating results for the past decade, brought about by low margins, persistent losses, and weak returns on capital," Loeb wrote. "While it is true that Sony has excellent products, such as the PlayStation, Xperia smartphones, and mirror-less cameras, several of Sony's product lines — e.g., personal computers and DVD recorders — lack scale and provide commoditized products at high costs to secularly challenged markets."

    In doing so, Loeb believes that Sony would be able to "reward management" based on divisional performance.

    In a statement provided to USA Today, a representative for Sony rejected the offer.

    "As President and CEO Kazuo Hirai has said repeatedly, the entertainment businesses are important contributors to Sony's growth and are not for sale," the statement reads. "We look forward to continuing constructive dialogue with our shareholders as we pursue our strategy."

    After five years of losses, Sony reported net profit for the fiscal year ending in March 2013 last week. Late last month, Sony doubled its projected earnings forecast. Recent sales of company assets, including its North American headquarters in New York City and its "Sony City Osaki" Tokyo property, contributed to its earnings forecast.

    Sony also announced recently that its upcoming next-gen console, the PlayStation 4, will not cause major fiscal losses, unlike the PlayStation 3.

    TL;DR

    Playstation is part of Sony's Entertainment Division.


    a Guy who owns 20% of Sony is threatening to sell.


    This is a very very bad situation.

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    Read it again champ...reading comprehension FTW.

    its proposal would have Sony offer 15-20 percent of Sony Entertainment to current shareholders as a means to incentive performance and increase profit margins.
    He wants to buy MORE of Sony so he can rape it later on because he knows they're on a winner with the PS4 and shares are likely to go up significantly in the next 1-2 years.

    "As President and CEO Kazuo Hirai has said repeatedly, the entertainment businesses are important contributors to Sony's growth and are not for sale
    But Kaz has said SCE is NOT for sale - he doesn't want shareholders getting their hooks into the Playstation and corrupting Sony's vision for the brand. It's a creative control issue, not a capital problem.

    Hedge funds are greedy capitalist pigs, there's nothing to see here.

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    Quote Originally Posted by Ps360 View Post
    a Guy who owns 20% of Sony is threatening to sell. This is a very very bad situation.
    1) there is no ONE Guy who owns 20% of Sony. It's a Hedge Fund, which means multiple investers ran by a board.
    2) The only reason the guy who runs said Hedge Fund wants Sony to sell off some of it's parts. Is so the investers can get paid more. Hedge Funds have short siteedness, they see a pay day and only pay days. The only real trouble Sony would be in, is if it actaually listened to this f*cking moron.

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    Doesnt he own about 6% of it?



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    Quote Originally Posted by Ps360 View Post
    Sony's largest investor calls for partial sale of Sony Entertainment | Polygon




    TL;DR

    Playstation is part of Sony's Entertainment Division.


    a Guy who owns 20% of Sony is threatening to sell.


    This is a very very bad situation.
    I am guessing the only things you know about economics you learned from Animal Crossing? Read it again, maybe get a 10th grader to help you this time, come back and realize what you've done wrong.

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    Quote Originally Posted by Rubicant81 View Post
    I am guessing the only things you know about economics you learned from Animal Crossing? Read it again, maybe get a 10th grader to help you this time, come back and realize what you've done wrong.
    That was harsh but funny.

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    TS;CR

    (Too Stupid; Can't Read)

    He owns 7%...

    And who the fuck cares? Sony Computer Entertainment has consistently been showing profits while the rest of Sony has been in the red.

    "Threatening to Sell" and calling for a "partial sale" are not even in the same ballpark.


    Ps360, when will you learn.

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    Odds are they would split off the division(s) into a separate company, which will allow the parent company to load its debt onto the new company. Investors love this stuff because they get 2 stocks for the price of one. It also allows them to either ride a more profitable spin-off to a nice cash-out a year later, or it allows the parent to become more profitable by eliminating debt.

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    Sony considers splitting the company after proposed IPO | Joystiq


    Sony executives are considering splitting the company's entertainment and electronics divisions, following billionaire Daniel Loeb's proposed initial public offering of its entertainment business. The entertainment arm includes all PlayStation properties, alongside Sony's film and music businesses.

    Loeb, with Third Point LLC, owns a 6 percent stake in Sony worth $1.1 billion, and is Sony's biggest investor. Sony CEO Kazuo Hirai confirmed that the top brass is considering Loeb's offer, but didn't say when it would come to a decision, Bloomberg reports.

    "It's only a start," Hirai said. "It's important that the board will discuss this and come to a decision that represents Sony's stance." Following Loeb's offer yesterday, Sony stock surged 9 percent.

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    You fail to understand, aswell as this hedge fund manager wanting part of the entertainment division as payment to investors, in other words, the "healthy" assets, he is basically calling on Sony to offload its weaker assets as part of restructuring, for example the low performing electronics divisions such as dvd recorders and other outdated technologies.

    The "split" mentioned in the link would just be a way of splitting the "healthy" assets from the "unhealthy", and is part of Sony's restructuring that's been going on for the past few years since the 2008 financial crisis, Panasonic have done it recently, and Northern Rock did it way back. Its all about making the company profitable, this hedge fund manager isn't going to sell his shares, or he will take a massive hit, he is just trying to boost company profits, share price, dividends and in the process boosting his own companies assets.

    The stocks were raised based on the possibility of these cost cutting measures, but also possibly down to a small event yesterday, you might of heard of it, which sent their competitors slightly down aswell.
    New Xbox Fails To Excite Investors As Microsoft, AMD Stocks Stays Flat While Sony Shoots Up 9% | TechCrunch

    Its not a bad situation, its just moving forward, and might not even occur if the electronics division can be turned around.

    Edit: Here's a recent article on Panasonic doing something similar in cutting "unhealthy" assets to bring the company back into profit

    Panasonic's TV manufacturing division saved by restructuring plan | News | TechRadar

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    Sony hires Morgan Stanley, Citigroup to consider entertainment IPO | Joystiq

    Sony has brought in major financial help from Morgan Stanley and Citigroup as it considers billionaire Daniel Loeb's proposition that it breaks off and sells its entertainment division, Bloomberg reports. Loeb, who owns a 6 percent stake in Sony stock worth $1.1 billion, wants Sony to sell as much as 20 percent of its entertainment business.

    Sony CEO Kazuo Hirai previously said the board would consider Loeb's offer. Loeb, with Third Point LLC, sent a letter to Sony on May 14 arguing an entertainment IPO would allow Sony to focus on its electronics arm, which has seen nine consecutive annual losses.

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