Sony’s stock closed today at 22.91 points, nearly two points higher than it was eight hours before. That’s good for a 9.25 percent jump in Sony’s market price, an outrageous jump that many companies would kill for. Then again, with such a low market valuation, such jumps aren’t unheard of for companies in Sony’s position.

Microsoft's stock closed down 0.66 percent, seemingly unaffected one way or another by Xbox One.

Your first instinct might be that this has to do with Xbox One’s reveal, which was light on games and heavy on entertainment. That might be part of it, but as Bloombergreports, the stock jump seems to have been driven primarily by a rumor we first reported on last week: Sony may be spinning off its entertainment division.

Bloomberg notes that the jump correlated directly with a report from massive Japanese newspaper Nikkei that the company is indeed “leaning toward spinning off its entertainment division,” which is primarily comprised of Sony Pictures Entertainment and Sony Music Entertainment. Such a move was first publically suggested by Daniel S. Loeb, a hedge fund manager who happens to own 6.5 percent of Sony.

The article also notes that “Sony executives are holding their regular corporate strategy meeting in Tokyo tomorrow. The company has relied on profit from its entertainment division to offset losses from its flagship consumer electronics business.”

What Sony’s actual strategy is remains to be seen, but between this fresh Nikkei rumor and, presumably, Xbox One’s reveal, Sony’s stock is surging.

http://ca.ign.com/articles/2013/05/21/sony-stock-up-nine-percent-after-xbox-one-reveal

I don't think so. MS investors don't have much in interest in Xbox since the division contributes a small fraction of their total profits.

I dont really get why Steve Balmer would be worried by the jump.

I dont really get why Sony stock jumped either (Blu-ray???)

Wh1pL4shL1ve_007 said: I dont really get why Sony stock jumped either (Blu-ray???)

The shares are up because there are rumors that they are going to spin off or sell a stake in their very profitable entertainment division, and then use that cash gained to help their struggling electronics division. Nothing to do with Xbox One. 

Did another version of that rumour appear at just after 1:00pm?

MoHasanie said: Wh1pL4shL1ve_007 said: I dont really get why Sony stock jumped either (Blu-ray???) The shares are up because there are rumors that they are going to spin off or sell a stake in their very profitable entertainment division, and then use that cash gained to help their struggling electronics division. Nothing to do with Xbox One.

Yea, but did X-Box One have no influence at all?

Why is Sony selling their more profitable division? I'm very confused at that. They keep selling, and selling, and selling, and soon there will be nothing left.

Michael-5 said: MoHasanie said: Wh1pL4shL1ve_007 said: I dont really get why Sony stock jumped either (Blu-ray???) The shares are up because there are rumors that they are going to spin off or sell a stake in their very profitable entertainment division, and then use that cash gained to help their struggling electronics division. Nothing to do with Xbox One.  Yea, but did X-Box One have no influence at all? Why is Sony selling their more profitable division? I'm very confused at that. They keep selling, and selling, and selling, and soon there will be nothing left.

1) Yes Xbox One had no influence at all.

2) Spin-off not fully sell.  It's be like Sony Financial Group.  Which sony still owns 60% of.

Basically they'd sell 20-40% of the company.  Still maintain control over it... and get a huge influx of cash of people wanting to buy into sony entertainment because they'd expect sony entertainments stock to rise. 

You'd do this in hopes that the extra money would allow Sony to make the next big hit Electronics product.  Since the downsides are relativily minor.

Though you'd only want that if you had faith in Sony's electronics division.  Otherwise it's just wasted money.

Is there a way to know that for sure?

Kasz216 said: Michael-5 said: MoHasanie said: Wh1pL4shL1ve_007 said: I dont really get why Sony stock jumped either (Blu-ray???) The shares are up because there are rumors that they are going to spin off or sell a stake in their very profitable entertainment division, and then use that cash gained to help their struggling electronics division. Nothing to do with Xbox One.  Yea, but did X-Box One have no influence at all? Why is Sony selling their more profitable division? I'm very confused at that. They keep selling, and selling, and selling, and soon there will be nothing left. 1) Yes Xbox One had no influence at all. 2) Spin-off not fully sell.  It's be like Sony Financial Group.  Which sony still owns 60% of.   Basically they'd sell 20-40% of the company.  Still maintain control over it... and get a huge influx of cash of people wanting to buy into sony entertainment because they'd expect sony entertainments stock to rise.    You'd do this in hopes that the extra money would allow Sony to make the next big hit Electronics product.  Since the downsides are relativily minor. Though you'd only want that if you had faith in Sony's electronics division.  Otherwise it's just wasted money.

Oh, I see, so Sony would still have complete control in decisions made by their entertainment buisness, but they have immediate cash now for PS4 dev.

However if their entertainment division is the most profitable, wouldn't 20-40% of future profits be given to new partial owners? This seems like a short term benefit, but a long term hinerance (unless PS4 really takes off because of it).

Still, Microsofts stock did fall by 0.7% or so right? How small is Microsoft's Gaming Division to their Windows Division? I think there was a small drop on MS, and a small boost to Sony because of X-Box One, but like Talal said, there is no way to know for sure.