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Sony to mull Third Pointís revival plan
Japan Times ^ | 06/21/2013 | AP

Posted on 06/20/2013 9:13:12 PM PDT by TexGrill

Sony Corp. needs more time to study a proposal from a U.S. hedge fund that wants the struggling electronics giant to sell stakes in the entertainment unit to help propel its nascent revival, its chief told shareholders Thursday.

Sony Chief Executive Officer Kazuo Hirai was speaking to a Tokyo hall packed with thousands of investors for its annual general shareholders’ meeting, where the proposal from Third Point, a hedge fund led by activist investor and billionaire Daniel Loeb, was high on people’s minds. It was the first question from the floor.

Hirai repeated his position that Sony takes the proposal seriously and will have it discussed by the board. But he ruled out a quick decision.

“This is an important proposal that will influence the future of Sony,” he said. “This will take time, and we are not going to come to a conclusion for the sake of coming to a conclusion.”

Loeb has proposed selling up to a 20 percent stake in Sony’s relatively healthy movie, TV and music business.

He is proposing that the money raised from the sale be used to strengthen Sony’s troubled electronics operations.

Third Point, one of Sony’s top shareholders, said this week it has raised its stake to 6.9 percent from the 6.5 percent Loeb had said it owned when it first made the proposal last month.

Loeb is best known for instigating a mass shake-up at Yahoo Inc.

(Excerpt) Read more at ...

TOPICS: Business/Economy; Foreign Affairs; Japan; News/Current Events
KEYWORDS: japaneconomy
Asking Sony to sell its profitable assets to re-nvest in its unprofitable assets doesn't sound like a winning strategy to me.
1 posted on 06/20/2013 9:13:12 PM PDT by TexGrill
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To: TexGrill
The goal of the hedge fund is to make money. By selling profitable units for a huge payday, they get their profits up front. The ‘remainders’ that get ‘reinvested’ in the unprofitable units MIGHT make them attractive enough to sell off as well. But Sony's goal is to remain Sony, a viable company, and the hedge fund is entirely in opposition to this end goal. They want their money, and they want it now.

Any company that gets in bed with a vampire should know up front that they will get bit, and investors who are upping their stakes at this point are trying very very hard to lose their money. Worst news this week? Microsoft effectively caving on most issues with gamers, taking away the massive advantage that the Playstation WAS going to enjoy.

Either way, Sony has been blowing through money like no tomorrow, and until they stop hemorrhaging money, there is little chance that a viable company will emerge out the other side.

2 posted on 06/20/2013 9:36:37 PM PDT by kingu (Everything starts with slashing the size and scope of the federal government.)
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