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Sony’s largest share holder calls for it to split

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The CEO of the largest single shareholder of Sony stock, Dan Loeb, has written an open letter to Sony’s current CEO, Kaz Hirai. In the letter he calls for Sony to sell off between 15%-20% of the company to raise funds to revitalise Sony Electronics.

To maximize Sony’s overall success, we believe the company should change the structure of its ownership of Sony Entertainment

Doing so will strengthen Sony by reducing its burdensome debt, thereby providing additional resources and capital to focus on revitalizing the resurgent Sony Electronics

While Third Point supports your agenda for change, we also believe that to succeed, Sony must focus, In a spirit of partnership, we offer our timely plan to strengthen Sony.

Dan Loeb, through his portfolio of companies, owns 6.5% of Sony and while that obviously isn’t a majority his forthright letter would have shaken the conservative Sony boardroom. While these sorts of out spoken shareholders are the norm in the west; it isn’t how shareholders work in traditional Japan.

Sony has officially responded already and stated

Sony welcomes investment in the company. We are focused on creating shareholder value by executing on our plan to revitalize and grow the electronics business, while further strengthening the stable business foundations of the entertainment and financial service businesses.

Personally I’m with Sony on this one, while Dan’s plan would ultimately show a greater return on investment I feel it would weaken the company as a whole. Sony has just returned to profitability, granted only because they sold their HQ, but it’s a change in the right direction and with the PlayStation 4 expected to succeed the future looks bright for Sony and Kaz.

But if Sony fails to meet their expectations you can be sure that more shareholders will start backing Dan’s plan which could spell the end of Sony as we know it.

Dan the man with the shareholder plan… don’t know why but that just tickles me

Last Updated: May 15, 2013

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