Sony Electronics

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DLD

Major Contributor
Sony is splitting its electronics (imaging, mobile, video/audio) from its entertainment (music, film studio) holdings. Some major investors had tried forcing it split their sensor business. This isn't quite that but would allow Sony to use its sensor business as leverage in some of their products.

It's going to become effective April, 1st (a typical financial year in Japan is April, 1st-March, 31)

A very terse PR release.

https://www.sony.net/SonyInfo/News/Press/202003/20-021E/
 
I really don't understand how these things work. What is the purpose of doing this? How and who does it help?
 
It helps stockholders, or at least that is what is hoped. Large conglomerates like Sony lose their luster over time, having acquired so many divisions that some do well and others are weak. Or it is such a mix of products, its hard to focus. So the stockholders want the company to split up to have a stronger company that it once was. They carve out different divisions in hopes that somehow it will perform better. Sometimes it works. Sometimes not. Take a look at what they own. How do you efficiently run this mess?

HP has done this twice. It started out making test equipment. HP became very successful in the early days of laser printers which moved them into computers. That became the big part of HP and the test equipment became the small part. It made no sense to keep them together as they were so different. The test equipment division was split off and became Agilent. Agilent was successful and split off again and the test equipment division became Keysight.
 
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Run&Gun said:
The NewsShooter article yesterday said a large shareholder had been pushing for the split for a while and because of the market downturn because of CV, it allowed him to buy even more shares giving him the leverage needed to force their hand.

https://www.newsshooter.com/2020/03/27/sony-camera-division-becomes-part-of-a-separate-company/
Click to expand...

It's Daniel Loeb of Third Point Management. About $16B in assets. Here's Wiki blurb about the company (they quote Bloomberg -
Third Point primarily invests in public equity, fixed income, and ADR markets globally and deploys an investment strategy that capitalizes on companies “undergoing events such as spinoffs or bankruptcies and pushes for corporate change".
Click to expand...

He didn't get everything he wanted though.

This is how one of the photography sites covered it in 2019

Now, Daniel Loeb, an American investor who runs a fund owning a $1.5 billion stake in the company, has called on Sony to completely separate its “crown jewel” image sensor business from the rest of the company.

Nikkei reports that Loeb sent a letter to investors on Thursday saying that Sony’s shares are heavily undervalued, due to the complexity of its portfolio. Lobe also attempted to convince Sony to spin off its music and movie divisions back in 2013 and failed. Now he’s saying that Sony should go full on with the entertainment and split off the sensor division instead to be able to more easily focus and increase value. It should become it’s own completely separate company.
Click to expand...

This was part of Loeb's letter quoted :

When you think of Sony, you think of the Walkman, you think of the consumer electronics business, you know they own a movie studio and some music, but you don’t think of them as a Japanese national champion in technology, with a $20 billion going to $35 billion valuation business in sensors.

As a standalone public company listed in Japan, Sony Technologies would be a showcase for Japan’s technology capabilities. Rather than just an uncut rough stone buried inside Sony’s portfolio, Sony Technologies would be visible as a Japanese crown jewel and technology champion.

– Daniel Loeb
Click to expand...

https://www.diyphotography.net/one-...g-for-them-to-spin-off-their-sensor-division/
 
Paul F said:
It helps stockholders, or at least that is what is hoped. Large conglomerates like Sony lose their luster over time, having acquired so many divisions that some do well and others are weak. Or it is such a mix of products, its hard to focus. So the stockholders want the company to split up to have a stronger company that it once was. They carve out different divisions in hopes that somehow it will perform better. Sometimes it works. Sometimes not...
Click to expand...
The split also give the individual funds more voice in corporate management. Sony's cap is at $76B as of now (was higher before the recent events ... duh), so Third Point's position was less than 2%. Now, if the split goes to his liking with the film/music and the financial group under a different management/ownership groups, Loeb should get up to 5% easily and to 10% potentially. And 10% carries a lot of weight.
 
So, this may not have anything to do with the new Sony corporate structure ... or maybe it does. Sony had a presser scheduled to stream on the 20th. And Canon was going to do likewise. Then Sony decided to push it back ten days. No NAB, so no reason to crowd the schedule.

Their likely announcements are FX-6 and cine lenses.
 
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