On June 13, Third Point published an investor letter in which it has reported about its recent investment in Sony Corporation (NYSE:SNE). In the letter, the fund discussed why it thinks the company is undervalued, how it trades at about half of its real value, and offered some business ideas to help the company grow an reach its true value.
You can download a copy of the letter below, while we share the part of it that covers Third Point's suggestions on how to improve the company's business here:
"A Stronger SonyIn order to release this value and put the Company on an even stronger footing for the future, we believe that Sony should: 1) consider a spin-off of its semiconductors division into a standalone public stock, re-named “Sony Technologies”, to be listed in Japan; 2) position New Sony as a leading global entertainment company; 3) consider the divestiture of its public equity stakes in Sony Financial, M3 Inc, Olympus, and Spotify, and; 4) optimize its capital structure. We make these recommendations with Sony’s long-term success at the forefront of our considerations and believe these actions will help Sony to more effectively and sustainably grow value for stakeholders in the decades to come. "
[caption id="attachment_521657" align="aligncenter" width="400"] Copyright: wolterk / 123RF Stock Photo[/caption]
Sony Corporation is a world-renowned Japanese manufacturer of consumer electronics products, with a market cap of $64.26 billion. It is headquartered in Kōnan, Minato, Tokyo. Year-to-date, its stock gained 10.92%, and on June 21st it had a closing price of $53.24. Today (June 23rd) Macquarie upgraded its rating on the stock to 'Outperform' from 'Neutral'.
At the end of March 2019, among smart money investors followed by Insider Monkey, billionaire Mario Gabelli's GAMCO Investors held the most valuable position in Sony Corporation worth $162.7 million, on the account of 3.85 million shares. On its heels was Jim Simons' Renaissance Technologies, which held 3.14 million shares outstanding, with a value of $132.59 million. Other bullish investors with positions worth mentioning, besides Dan Loeb's Third Point, included Eric W. Mandelblatt's Soroban Capital Partners, Seth Fischer's Oasis Management, and D. E. Shaw's D E Shaw.
Download a copy of Third Point's "A Stronger Sony Letter" here: