Sony to Loeb: We're Listening, but... -- WSJ
15 Junio 2019 - 2:02AM
Noticias Dow Jones
By Takashi Mochizuki
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (June 15, 2019).
TOKYO -- The latest push by investor Daniel Loeb to break up
Sony Corp. presents a dilemma for Chief Executive Kenichiro
Yoshida, who is generally sympathetic to Wall Street's thinking but
wants to keep his conglomerate intact.
In a letter to investors Thursday, Mr. Loeb's hedge fund, Third
Point LLC, said Sony should spin off its semiconductor unit, which
is known for making components for Apple Inc.'s iPhones. It also
said Sony should consider shedding stakes in Spotify Technology SA
and a Sony financial unit that sells life insurance in Japan.
A Sony spokesman declined to comment on Mr. Loeb's letter but
said the company values input from financial markets on how to
achieve long-term growth.
Mr. Loeb's challenge highlights the breadth of businesses into
which Sony has expanded over the decades, many of them lacking an
obvious connection to each other. The company owns a Hollywood
studio and a music company, makes the PlayStation videogame
consoles, sells life insurance to Japanese consumers and invests in
health-care companies. And it still manufactures televisions and
Walkmans.
Investors welcomed the possibility of some pruning, lifting Sony
shares 3.1% in Friday trading in Tokyo.
The image sensors made by Sony's semiconductor unit are used in
most of the world's smartphone handsets including those made by
Apple and Huawei Technologies Co. The unit is poised for growth as
car makers add imaging devices to enable autonomous driving.
Ace Research Institute analyst Hideki Yasuda said a spinoff
would allow the unit's management to make aggressive investments
without being slowed by the conglomerate.
"If Sony's semiconductor unit truly believes it can be a major
player in the car industry, it should act quickly," especially
since the smartphone market has become saturated, Mr. Yasuda
said.
Toshiba Corp. adopted a similar idea in 2018 by selling a
majority of its NAND flash-memory unit to investors led by Bain
Capital of the U.S.
This is the second time Mr. Loeb has gone public with demands on
Sony. In 2013, he called on the company to split off its music and
movie units. Sony rejected the idea, saying those units had
synergies with videogames and Sony hardware such as televisions and
headphones.
This time, Mr. Loeb focused his proposals on parts of Sony that
could be hived off without disrupting the synergy between
entertainment hardware and software.
Mr. Loeb said he had invested $1.5 billion. He didn't say what
percentage of Sony he owned, but the company's market
capitalization as of Friday's close was just under Yen7 trillion or
about $64.6 billion.
Mr. Yoshida, the Sony CEO, long served in the company's finance
division and helped the company's revival in recent years by making
cuts to loss-making divisions. Along with Chief Financial Officer
Hiroki Totoki, he has emphasized the importance of having a good
relationship with investors.
Mr. Yoshida has been disclosing more details about cash flow in
response to investor calls for more focus on that measure. And his
recent deal with Microsoft Corp. to work together on internet
technology for videogames was welcomed by investors who wanted a
robust response by Sony to a foray into the game business by
Alphabet Inc.'s Google.
Mr. Yoshida said last month that discussions with investors,
including those with Mr. Loeb in 2013, benefited management by
giving another perspective on strategy -- a warmer tone toward Wall
Street than many Japanese CEOs adopt.
But he also gave little indication he was willing to break off
big chunks of Sony. He said the image-sensor business was central
to developing new businesses in artificial intelligence.
Atsushi Osanai, who used to work at Sony and now is a professor
at Waseda Business School in Tokyo, said the company's wide
portfolio of businesses helped tamp down volatility, especially
since the movie unit has its hits and misses.
Also, Mr. Osanai said Sony's image sensors could take advantage
of insights from the movie makers about how best to capture images.
"In fact, sensors are at the heart of Mr. Yoshida's mantra about
serving the creators of content better," he said.
Write to Takashi Mochizuki at takashi.mochizuki@wsj.com
(END) Dow Jones Newswires
June 15, 2019 02:47 ET (06:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
Sony (NYSE:SONY)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Sony (NYSE:SONY)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024