Dan Loeb Renews Push to Break Up Sony, Yet Praises Leadership

Dan Loeb isn’t through with Sony just yet.

The hedge fund manager and founder of asset management firm Third Point told investors in a letter Thursday that while Sony Corp. “has avoided the topic of portfolio optimization,” the company should consider divesting non-core assets beyond what it has done already. “[W]e continue to believe that Sony’s media and semiconductors franchises can stand alone and create more value independently than together,” Loeb wrote.

Loeb’s Third Point announced a sizable stake in Sony in June, sending a letter to the Japanese company’s board arguing that it should split itself up by spinning off its semiconductor business and focusing its efforts on media, film and gaming.

Sony sold its $760 million stake in the Olympus camera business, but CEO Kenichiro Yoshida otherwise rejected Third Point’s suggestions in an open letter published in September.

That being said, in the letter Loeb sent Thursday, a copy of which was viewed by The Hollywood Reporter, he praised Sony’s leadership, saying it had “a capable management team open to improving shareholder value and willing to listen to our suggestions about how the company could reach its full potential.”

Loeb also wrote that Sony as a significant growth driver for Third Point in fiscal 2019, listing it among his “top five winners for the year.” He wrote that the company benefited from timing, having “invested in Sony in Q1 2019 when shares traded down on market fears that cloud gaming posed a substantial threat to the company’s PlayStation franchise and overall gaming business.”

Sony shares were trading between $43 and $48 in Q1 2019. They were trading at $71 as of this writing. The company is set to report its Q3 2019 earnings next week.