|Bid||46.76 x 40000|
|Ask||47.22 x 40000|
|Day's Range||46.88 - 47.57|
|52 Week Range||36.89 - 52.85|
|Beta (3Y Monthly)||0.41|
|PE Ratio (TTM)||9.84|
|Forward Dividend & Yield||0.33 (0.76%)|
|1y Target Est||N/A|
Sales of traditional console-based video games were down 17% in May from a year ago, as gamers continue to shift to free-to-play games, mobile offerings and a couple of traditional games had lackluster debuts. Wedbush's Michael Pachter continues to have Outperform ratings on several game companies, but he noted the industry is changing. The retail sales figure missed his estimate of $150 million.
(Bloomberg) -- Dan Loeb is back trying to whip Sony Corp. into shape, but he’s drawing fire this time around after reversing course from his prior thesis.Loeb’s Third Point last week revealed a $1.5 billion stake in the Tokyo-based company and advocated for a spin off of its chip business to finance deeper expansion in entertainment, including games and movies. That’s the opposite of what he championed in 2013, when he called on executives to sell a part of their film division.“Loeb advocated for moving away from entertainment, but Sony is thriving today precisely because they went in the opposite direction," said Masahiko Ishino, an analyst at Tokai Tokyo Research Center, referring to both movies and games. "Amid trade wars, losing chips would be a negative in terms of Japan’s national security. It’s not something that needs to be done right now."The cool reception came as Sony stakeholders gathered in Tokyo on Tuesday for the company’s annual general meeting. Loeb’s proposals are not up for a vote, although analysts said he will likely be a main topic of conversations among shareholders. Sony declined to comment on the Third Point proposal, but said it takes all shareholder suggestions seriously.Chief Executive Officer Kenichiro Yoshida repeated that message Tuesday, saying management is constantly studying how to increase long-term shareholder value. “That includes deliberations about how to structure our portfolio of businesses,” he said.Loeb laid out his thesis personally to Yoshida last week in New York. The CEO mostly listened and didn’t rebuff the activist in terms of valuation or feasibility of implementing the proposals, giving Third Point more confidence to move ahead.The hedge fund sees Sony as a different company from six years ago, which is why its focus has changed from shunning entertainment to embracing it. Sensing an opening with Yoshida’s more investor-friendly approach, Loeb is trying again with what he believes he can realistically achieve. The next step is getting a formal reaction from management.Analysts almost universally applauded his effort last week to reduce Sony’s so-called "conglomerate discount," or the idea that its many disparate businesses -- from entertainment to chips to finance -- are collectively undervalued and would benefit from being split apart. But they questioned whether Third Point’s proposals are realistic or make strategic sense.For one, some are not convinced that a standalone chip unit can finance the large investments necessary for growth and said it’s better done as part of a bigger group, which can offset temporary losses. They also argued that the unit currently enjoys strong synergy with Sony’s other product divisions and should be integrated more closely rather than spun out.“We think that spinning off the semiconductor business could in fact reduce its actual value,” Yasuo Nakane and Kenichi Saita, analysts at Mizuho Financial Group Inc., wrote in a report. “The semiconductor subsidiary’s technological assets and intellectual properties are inseparable from the electronics products and solutions.”Others questioned Loeb’s estimate for how much a standalone chips unit could fetch at a time when global phone sales are shrinking and the U.S. is waging war on one of Sony’s largest customers, Huawei Technologies Co.“We think Third Point’s US$33-39bn valuation is too high,” wrote Macquarie Group analysts Damian Thong and Hiroshi Taguchi, who currently value the chips division at $11 billion. "But there is wide scope for price discovery above the current embedded value."Then there’s the issue of Sony’s historically stubborn management. Yoshida has so far side-stepped calls to sell or spin off businesses. Instead, he has carried out two record buybacks this year, pleasing investors and preempting calls for more drastic change. And at $1.5 billion, Loeb’s new stake represents about a third of the 6.5% of voting shares he accumulated in 2013.“Third Point’s key proposals about the divestiture of Sony Financial and spin-off of the semiconductor business are unlikely to be easily accepted by management," wrote CLSA analyst Amit Garg. Still, he said the company could yield given that the buybacks "have failed, with the stock remaining at depressed multiples."Loeb is probably not helping his case by saying that sell-side analysts are part of the problem. In his presentation, he said a lack of familiarity with Sony’s many different businesses results in analysts applying discounts to divisions they’re unfamiliar with, contributing to a lower valuation for the entire company.“The lack of entertainment sector expertise among Sony’s sell‐side analysts may explain the wide skew in valuation methodologies, multiples, and target prices,” Third Point wrote in its presentation last week. "We sympathize with the challenge they face: maintaining an up‐to‐date, informed view on a diverse range of industries, most of which are outside their core expertise."(Updates with CEO’s comment from the fifth paragraph.)\--With assistance from 院去信太郎 and Kurt Schussler.To contact the reporter on this story: Yuji Nakamura in Tokyo at firstname.lastname@example.orgTo contact the editors responsible for this story: Edwin Chan at email@example.com, Peter ElstromFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Movies do go well with chips, at least for Sony. its semiconductor business, six years after pressing the company to spin off part of its entertainment business. Mr Loeb’s hedge fund Third Point has once again invested in Sony via a $1.5bn stake.
Sony is a "one-of-a-kind" company, with exposure to gaming (43% of profits), semiconductors (20%), music (16%) and pictures/movies (8%), the presentation said. The Street isn't giving Sony sufficient credit for growing profits under CEO Kenichiro Yoshida, the presentation said.
Activist investor Dan Loeb still thinks (6758) should spin off part of its business. Loeb told investors his Third Point hedge fund has built a $1.5 billion stake in Sony in a letter on Thursday night, unveiling a proposal for the company to spin off its semiconductors division. American depositary receipts on Sony (ticker: SNE), which is listed in Tokyo, were up 3.2% in early trading Friday.
is engaging in dialogue with Third Point and its founder, Daniel Loeb, amid the activist hedge fund's second push for the Japanese electronics and entertainment company to spin off its semiconductor business, the Financial Times reported. In a letter to its investors circulated Thursday, Third Point said that from its vantage point Sony's stock is undervalued and that the company's portfolio needs to be less complicated. The firm said it has invested $1.5 billion in building an equity position in Sony.
(Bloomberg) -- Activist investor Dan Loeb disclosed a $1.5 billion stake in Sony Corp. and pushed the company to make dramatic changes, including spinning off its semiconductor business and listing it in Japan.Sony’s shares rose 3.1% in Tokyo after Loeb’s Third Point published a letter and 102-page presentation pushing for changes at the Japanese media and electronics giant, including sales of its insurance business and stakes in companies like Spotify Technology SA. If the company spins off the semiconductor business and executes on its long-term vision, the newly independent entity could be worth $35 billion within five years, according to the New York-based hedge fund firm.“We rarely find companies like Sony that have a depressed valuation, high-quality underlying businesses, numerous options for portfolio optimization, and a capable management team,” Third Point said on a website entitled “A Stronger Sony.” “We believe a spin‐off of Sony Technologies brings inherent advantages that will unlock long‐term value.”Sony spokesman Takashi Iida declined to comment on Loeb, but said management takes constructive proposals "seriously."Sony is the leader in image sensors used in smartphones and digital cameras. The chips business generated 144 billion yen ($1.3 billion) in operating profit on 879 billion yen of revenue in the latest fiscal year. That’s similar in size to Analog Devices Inc. and Advanced Micro Devices Inc., two companies with market values of more than $30 billion.But some analysts questioned the proposal, saying the chips unit is better off as part of a larger group. Despite a slowdown in global phone sales, the division has maintained profit growth as newer models adopt more cameras per device.“I’m uncertain whether a spin off would actually increase value,” said Hideki Yasuda, an analyst at Ace Research Institute. “The semiconductor industry is notoriously volatile and requires constant, huge investments. That’s easier to manage if it’s done as a part of Sony’s bigger group.”Sony Chief Executive Officer Kenichiro Yoshida hasn’t shown interest in parting with the chips business. He underscored his commitment last month by increasing investment in image sensors to about 700 billion yen in the three years ending March 2021, and unveiled plans for new chip designs outfitted with artificial intelligence.“By leveraging the superior technology we have developed in this business, we expect to maintain our industry leading position going forward,” he told investors last month. “We expect this business to generate high return on investment in the long term.”Third Point also wants sales of its stakes in Sony Financial, M3 Inc, Olympus Corp. and Spotify, which it estimates currently account for about 20% of Sony’s market capitalization. Doing so would give the company cash to invest in its main entertainment business: gaming, music and movies, it said.Loeb was less concerned with Sony’s legacy electronics businesses, which make TVs, cameras and mobile phones. These assets are smaller than the entertainment operations and they’re “no longer the drag on profitability that they were six years ago,” Third Point said. Cash flow from electronics can be reinvested into entertainment, it added.This is the second time Loeb has agitated for changes at Sony. In 2013, Third Point bought a stake and proposed a partial spin off and initial public offering of the company’s entertainment business. He was unsuccessful.Loeb has been known for his aggressive tactics and so-called poison pen letters that criticize companies’ management teams. He has mellowed somewhat in recent years: a high-profile investment in Nestle SA since 2017 has been relatively cordial. Still, he can turn combative when he deems it necessary, as evidenced by a proxy fight last year with Campbell Soup Co.Shareholder activism is still pretty rare in Japan, so Loeb is taking the less aggressive approach for now. Third Point credited Sony’s management, under former Chief Executive Officer Kazuo Hirai and then Yoshida, for implementing dramatic changes at the company since 2014.“Despite these substantial improvements, Sony continues to be as undervalued today as it was in 2013, trading at its lowest forward multiple of earnings in the last decade,” Third Point said.Now that Sony is on a better path operationally, Yoshida can tackle this "by shifting his focus to unlocking the value of the company’s tremendous portfolio of assets," Third Point said. “Today, Sony trades at roughly half our estimate of intrinsic value, with additional upside from optimizing capital allocation.”Although Loeb’s prior attempt with Sony was unsuccessful, it did result in changes including the replacement of executives at its film division. Yoshida was Sony’s chief financial officer at the time of the last campaign, and recently said he looked back fondly on his interaction with the activist investor.“I thought it was a good thing that we negotiated with Third Point at the time,” Yoshida said in a group interview last month. “It’s important to talk to investors. Whether you can convince them is part of running a business.”(Updates with company comment in third paragraph and shares.)\--With assistance from Ian King and Yuki Furukawa.To contact the reporters on this story: Scott Deveau in New York at firstname.lastname@example.org;Yuji Nakamura in Tokyo at email@example.comTo contact the editors responsible for this story: Elizabeth Fournier at firstname.lastname@example.org, Alistair Barr, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Dan Loeb wants to split up Sony Corp.In a seven-page letter and 100-slide presentation, Third Point LLC’s founder and CEO outlined what Sony’s shares have been saying for years: The company is worth more than the sum of its parts.Any Sony investor ought to share the frustration of Third Point, which owns a $1.5 billion stake. After posting losses for six out of seven years, Sony just notched its fourth consecutive annual profit (up 87% in the year through March 31). While this turnaround lifted shares, they’ve remained largely stagnant since the end of October 2017, when PlayStation demand spurred a fourfold increase in quarterly operating profit.The company’s return on common equity went from negative 5.5% in fiscal 2015 to 27.3% in the most recent year, while its return on invested capital has expanded almost fivefold in the past two years. Yet the shares are trading at a mere 12.6 times estimated forward 12-month earnings, below the 18.6 times for Nintendo Co. and 14.9 times for Canon Inc.(1)To that end, Loeb’s latest push for change at the Japanese electronics giant includes a request to spin off the semiconductor business and keep core Sony focused on gaming, music and pictures. The mechanics are deceptively simple, and thanks to new tax laws in Japan, potentially quite lucrative.Sony needn’t run an IPO in the traditional sense of selling some shares in one of its divisions. Instead, it can split into two listed companies: New Sony and Sony Technologies. The latter would house the chip business, and every existing Sony shareholder would get an equivalent stake in both. To do this, management would need to admit something that’s been clear for a decade: Sony messed up.Twenty years ago, the company was poised to become what Apple Inc. is today. Back then, Sony owned the portable music market. It invented the Walkman, and when CDs came along it brought out the Discman. The advent of digital music, a catalog of its own, and a range of components to put it all together meant that Sony should have invented the iPod and iTunes. But it didn’t. And, as Steve Jobs proved, you don’t need to own the various parts to dominate the whole. And yet Sony has held on to these disparate parts far longer than it should have.In my view, Sony should keep all of its various divisions together if, and only if, there are demonstrable synergies. Samsung Electronics Co. proves that such synergies aren’t only possible but extremely valuable. The South Korean company’s ownership of displays, memory chips and semiconductor manufacturing allows it to keep churning out the best smartphones every year (that is, when they don’t explode). Yet Loeb’s strategy doesn’t adequately address what Sony should do after that. Third Point mentions that post split, New Sony would have room to raise debt, given its inefficient balance sheet, should it need to make acquisitions. It already has $25 billion in total cash, and net cash of $3.6 billion while free cash flow last year was $8.6 billion.Third Point notes that Sony has the capacity for $34 billion in buybacks over the next three years while keeping net leverage(2) under 1 times. Unfortunately the two buybacks it already announced this year, for a total of 300 billion yen ($2.7 billion), have done little to boost the stock. Perhaps share performance was muted by the tough macroeconomic environment, especially in tech. If that’s the case, then it’s worth noting that a global slowdown and continued U.S.-China tensions aren’t likely to disappear anytime soon. The case for a reorganization is compelling and shouldn’t be ignored. But both Loeb and Sony management need to spend more time working out what to do with the New Sony.(1) Third Point notes that one reason for a split would be to allow the new entities to be better compared against appropriate peer groups.(2) Third Point defines net leverage as net debt/Ebitda.To contact the author of this story: Tim Culpan at email@example.comTo contact the editor responsible for this story: Rachel Rosenthal at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
This marks the second time in six years that Loeb, one of the world's highest-profile activist investors, has targeted the Japanese electronics maker - although last time he pushed for a radically different shake-up, pressing for a spin-off of entertainment assets. Reuters reported in April that Third Point was once again targeting Sony.
Daniel Loeb's activist hedge fund Third Point LLC called on Sony Corp on Thursday to spin off its semiconductor business and sell off stakes in Sony Financial and other units, in order to position itself as a leading global entertainment company. This marks the second time in six years that Loeb, one of the world's highest-profile activist investors, has targeted the Japanese electronics maker - although last time he pushed for a radically different shake-up, pressing for a spin-off of entertainment assets.
US activist investor Daniel Loeb has called on Sony to spin off its “crown jewel” image sensor business to unlock the Japanese group’s true worth as a global entertainment powerhouse. In a letter to investors on Thursday, Third Point, Mr Loeb’s hedge fund, publicly acknowledged for the first time that it had reinvested in Sony through a $1.5bn stake. In this week’s letter, Mr Loeb said Sony’s shares remained heavily undervalued despite its recent turnround due to the complexity of its portfolio including electronics, image sensors used in Apple’s iPhones, games, films, music and financial services.
Sure, Sony says it's skipping E3 this year, but let's take a look at the facts. Within the past eight weeks, the company has unveiled the PlayStation 5, teasing out details about its upgraded architecture and 8K capabilities, and clearly delineating the start of a new console generation.
Code named Project Scarlett, the device will reduce latency when loading games. Microsoft also said its xCloud streaming platform, which lets customers play their games anywhere by storing them in the cloud, will debut in October. The news underscored Microsoft’s commitment to a new generation of hardware even as it introduces new ways for consumers to stream games onto multiple devices.
Microsoft News: Partnerships, Africa, Gaming, and MoreMicrosoft and Sony agree to work togetherThis month, Microsoft (MSFT) and Sony (SNE) announced a strategic partnership that will see them collaborate in semiconductors, AI, and cloud-based
Big Media Seeking Revival: DIS, CHTR, ATUS, and VIAB(Continued from Prior Part)Charter shed 145,000 pay-TV customers in the first quarterCharter Communications (CHTR) has ordered two original TV shows from Sony Pictures (SNE), including the hit
Before Canon and Nikon even launched their all-new full-frame mirrorless camera systems, I figured they'd have a tough time against the entrenched leader, Sony. They needed to be very aggressive with the pricing and features, something neither company tends to do. But the opportunity was there. Both were building all-new camera systems from scratch, so they could examine what made Sony's stellar A7 III and A7R III cameras successful and then try to do better. Canon's EOS R and EOS RP, and Nikon's Z 6 and Z 7 have now been on sale for a few months, so what's the verdict? Well, the market has spoken loud and clear. At least in Japan, the home market of all these companies, the Sony A7 III is the clear leader in sales while Canon and Nikon have dropped. So what went wrong? After testing all the cameras, I believe it's a tale of Sony's technological superiority and missed opportunities by its rivals, especially Canon.
Activist investor Daniel Loeb has made another big call for Sony to break up its business. Yahoo Finance's Jen Rogers, Myles Udland and Julia La Roche discuss.