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Forums - Sony Discussion - Sony rejects investor's proposed sale of entertainment business

Sony CEO Kazuo Hirai says the company will not spin off a portion of its entertainment business, responding to investor Daniel Loeb of Third Point LLC'sproposed plan to boost performance at the Japanese electronics giant.

In his four-page letter to Loeb, Hirai wrote "after careful review, the Sony Board of Directors has unanimously concluded that continuing to own 100% of our entertainment business is the best path forward and is integral to Sony's strategy."

"Sony Pictures and Sony Music are critical elements of our strategy and fundamental drivers of Sony's growth for the future," Hirai wrote, later adding, "I am personally involved in the oversight of these businesses and firmly committed to assuring their growth, to improving their profitability, and to aggressively leveraging their collaboration with our electronics and service businesses."

On the electronics front, Hirai said Sony is committed to revitalizing the division, saying, "While the industry environment for our electronics business remains challenging, we have made significant progress over the past year, and we are confident that we are on the right path." Hirai touts the well-received Xperia line of smartphones and Sony's Cybershot RX1 camera, explaining that the turnaround of Sony's television business is "progressing as planned."

"We are also encouraged by the positive feedback from the announcement of the PlayStation 4, which is highly integrated with our leading networks and mobile businesses," Hirai wrote. "We are investing in Mobile, Imaging and Game, and these business units are inextricably linked to our One Sony strategy."

In May, Loeb urged Sony to let investors to take up to a 20 percent stake in Sony Entertainment and implored it to better focus its efforts on Sony Electronics.

"Sony Electronics has suffered frustrating results for the past decade, brought about by low margins, persistent losses, and weak returns on capital," Loeb wrote in his letter to Sony. "While it is true that Sony has excellent products, such as the PlayStation, Xperia smartphones, and mirror-less cameras, several of Sony's product lines — e.g., personal computers and DVD recorders — lack scale and provide commoditized products at high costs to secularly challenged markets."



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YES! Loeb seems like a typical rich toolbag. George Clooney had nice words for him.

George Clooney slams Daniel Loeb over Sony.

Actor George Clooney has criticised one of the most famous hedge fund managers on Wall Street, calling billionaire Daniel Loeb a "carpet bagger" who "knows nothing about" the film industry.

http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/10221328/George-Clooney-slams-Daniel-Loeb-over-Sony.html



Dont mess with Batman!



Good, The idea sounded stupid to begin with.



Potential is there for more money. Selling you stand still. The gaming division makes sense to sale because they lost more money than they put into it(ps3).Sony doesn't need the gaming division but more importantly they don't consoles. But will that change with ps4? Maybe. But I doubt it will be big enough to justify.



"Excuse me sir, I see you have a weapon. Why don't you put it down and let's settle this like gentlemen"  ~ max

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Thank God, Loeb was nothing more than greedy crook. Good thing that Kaz is in charge and saving this company.



Sigs are dumb. And so are you!

the-pi-guy said:
ninetailschris said:

Potential is there for more money. Selling you stand still. The gaming division makes sense to sale because they lost more money than they put into it(ps3).Sony doesn't need the gaming division but more importantly they don't consoles. But will that change with ps4? Maybe. But I doubt it will be big enough to justify.


I disagree, Sony needs the gaming division.  It was during the PS2 and I think PS1 their most valuable asset.  I'm pretty sure that was also while the rest of Sony was actually doing great.  While they haven't made much money with the PS3, it was really just one "failure", not something they can't turn around.  It seems that with the PS4 it will be a big turn around, I believe they said they are not going to lose money day 1 on the PS4.  


Not disagreing about turn around. But the question is will the games by Sony on the console will make a profit. Sony problem will be getting that money back for next quarter. Let's be honest kill zone isn't going to sell 2 million in 3 months. Knack probably not even a million. 3rd party will be fine because multiple consoles/PC. I wondering how they will profit next quarter.



"Excuse me sir, I see you have a weapon. Why don't you put it down and let's settle this like gentlemen"  ~ max

ninetailschris said:

Potential is there for more money. Selling you stand still. The gaming division makes sense to sale because they lost more money than they put into it(ps3).Sony doesn't need the gaming division but more importantly they don't consoles. But will that change with ps4? Maybe. But I doubt it will be big enough to justify.

 

 

 

Yeah... no. That's got to be the worst thing Sony could do. Ps4 will change it because they won’t losses their ass with every system sold. There's a big difference between ps3 and 4. 4 looks to be making profit right out the gate, or at least shortly after.



Nice



Sony charging for online with PS4 is going to bring in a tidy profit.