American billionaire calls for breakup of Sony

The manager of a leading American hedge fund, one of Sony Entertainment’s biggest shareholders has a 6.5 percent stake and plans to boost the Sony share price by 60%.

Notorious for in his power play breakups and dismissals at both
Yahoo and Google, Daniel Loeb, the chief executive of Third Point,
now has his sights set on Sony. Loed allegedly holds a 115 billion
yen ($1.13 billion) worth of shares in Sony, which has a total
market value close to $18.5 billion.

Loeb’s hedge fund quietly accumulated its 6.5 percent stake, and
has indicated he would accept a seat on Sony’s board.

According to the NYT’s Dealbook, Loeb hand-delivered a
letter to Sony CEO Kazuo Hirai in Tokyo.

The Californian jetted to Tokyo this past weekend to deliver the
letter, and to meet with senior Sony executives, government
officials, and regulators.

Mr. Loeb proposed divvying up 15 to 20 percent of Sony shares to
existing Third Point investors and also promised $2 billion upfront
in cash to ensure the success of the transition.

“Our plan shifts that paradigm and we believe, if managed
properly, it could result in as much as 60 percent upside to Sony’s
share price,” Third Point said in a statement.

George Boyd, a spokesman for Sony, said he had no immediate
comment.

Loeb wants Sony to break up its current structure and spin off
part of its entertainment division, which includes its very successful Hollywood production unit,
NYT Dealbook reported. Loeb also wants Sony to take a
leaf from Apple’s business plan and cut costs by only focusing on a
few core products.

A profitable venture?

Shares of Sony have sunk nearly 85 percent over the last 13
years, losing out to Apple, Samsung, and LG in the electronics
market. Despite the slump, Sony remains a very reputable company in
Japan, and still has a market value of about $18 billion.

Though its sales were dormant over the last 5 years, last week,
Sony posted its earnings at $458 million, down $5.7 billion
year-on-year.  Sony’s operating costs yielded a $2.45
billion profit after a turbulent 2011 when it lost $5.7
billion.

Sony has consolidated its American operations- in January it
announced the sale of its 37-story Manhattan skyscraper
headquarters, which it reportedly sold for a sticker price of $1.1
billion. The sale sent its stock soaring, up 12 percent, its
biggest gain since October 2008.

Revenue rose 4.7 percent, but investors doubt how flush the
numbers are, since the weaker yen has boosted its competitiveness
and value overseas. 

Last week the company forecast a 16 percent increase in profit,
as it prepares to launch a new smart phone and

This article originally appeared on : RT