Daniel S. Loeb, a hedge fund manager who owns 6.5% of Sony, has suggested that the company break its electronics and entertainment divisions apart, according to a report in the New York Times. He delivered his message via letter, which he gave to Sony CEO Kaz Hirai in person while visiting Tokyo.
Loeb’s shares, valued at $1.1 billion, give him considerable weight in conversations concerning Sony. His plan would essentially have Sony “spin off part of its entertainment arm,” according to the article, which is comprised of three major pieces: Sony Music Entertainment, Sony Pictures Entertainment and Sony/ATV Music Publishing.
The rest of the company is electronics focused, and includes not only Sony’s forays into televisions, cameras, computers, sound systems, and more, but also its mobile phone arm and, perhaps most prominently, Sony Computer Entertainment, the stewards of the PlayStation brand.
According to the Times, “Mr. Loeb said he believed that spinning off a portion of the entertainment business to Sony shareholders could sharpen the company’s focus and lead to higher profit margins, while helping to revive the core electronics business. He has also contemplated a spinoff or sale of other operations, including Sony’s insurance division, which accounted for much of the company’s profit last quarter.”
That profit -- $436 million in fiscal year 2013 – is Sony’s first since 2008.
Colin Moriarty is a Senior Editor in charge of IGN’s PlayStation coverage. You can follow him on Twitter and IGN and learn just how sad the life of a New York Islanders and New York Jets fan can be.
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