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Activist Hedge Fund Ups Its Sony Stake

.New York (HedgeCo.Net) – Hedge fund Third Point has added five million shares in Sony Corp.,  taking its stake to 7% (up from 6.5%). Daniel Loeb and his hedge fund want Sony to spin off part of its entertainment arm that will include a Hollywood movie studio and music business. Loeb expects that spinning off a portion of the entertainment business could sharpen Sony’s focus and improve profit margins.

In a letter to Sony boss Kazuo Hirai, Loeb says the division lacks the “discipline and accountability” of its competitors.

“It seems difficult to argue that Entertainment would not be strengthened by the transparency that comes with public reporting, an active media analyst community evaluating financial performance regularly, and an expert board with strongly aligned incentives,” the letter said, according to the NYT.

Sony seems to be taking Loeb seriously, hiring a bank to consider the partial spinoff, which would see Sony divest 20% of its entertainment business. 

In 2007 Sony spun off its banking and insurance unit.

Alex Akesson
For HedgeCo.net
alex@hedgeco.net
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