A hedge fund investor who happens to be a massive shareholder at Sony has called for a breakup of the entertainment corporation.
The New York Times has reported that the investor, Daniel S. Loeb, has invested over $1.1 billion in Sony and is one of the largest shareholders in the company. Loeb is said to have personally contacted Sony CEO Kazuo Hirai in a letter regarding the matter.
The letter to Sony said, "Sony has stood for innovative engineering and consumer satisfaction for
decades. From televisions to
gaming consoles to handsets, Sony epitomizes the proud legacy of
Japanese manufacturing ingenuity, superior product design, and excellent
user experience."
"However, many casual observers would be surprised to learn that while
Sony is electronics, much of its current value is derived from a hidden
gem--Sony's Entertainment division. Like many conglomerates [Third Point
has] invested in previously, Sony has two strong businesses facing
different challenges side by side, each obscuring the other's true
worth."
"To maximize Sony's overall success, we believe the Company should
change the structure of its ownership of Sony Entertainment. Doing so
will strengthen Sony by reducing its burdensome
debt, thereby providing additional resources and capital to focus on
revitalizing the resurgent
Sony Electronics."
A spokesperson from Sony replied to the letter by saying that the company is "focused on creating shareholder value by executing on our plan to
revitalize and grow the electronics business, while further
strengthening the stable business foundations of the entertainment and
financial services businesses.”
Kazuo Hirai plans to discuss the future of the company in the coming days.