Dan Loeb had it enough with Sony Corp (ADR) (NYSE:SNE) as he liquadated his position today, according to Bloomberg . Third Point’s 2014 Q3 investor letter, the hedge fund which he founded is certainly worth a look in this regard.
Pavel Alpeyev who is a reporter for Bloomberg News in Tokyo reported on the market and investor sentiment in the wake of this new development.
“[…] As of a few minutes ago Sony Corp (ADR) (NYSE:SNE) shares were up about 3%, which is quite a bit better than the 2% increase for the Topix. As for the investors, I think a lot of people here appreciate the pressure Third Point as an activist investor exerted on Sony for change, but disagreement is about the details […],” reported Alpeyev.
The details that he mentioned is a difference of opinion between Loeb, and other investors regarding the spinoff of Sony’s entertainment business. According to Alpeyey, it is generally felt that Kazuo Hirai, Sony Corp (ADR) (NYSE:SNE)’s CEO has made enough progress with the reforms and further breakup is unnecessary.
Perhaps this is owing to the difference in style of management that is carried out in U.S and Japan. A U.S activist investor, like Loeb, will not use the word enough progress, if the company is still showing losses. There is a very good chance that no activist investor will use that term for circumstances surrounding Sony Corp (ADR) (NYSE:SNE). This could also be the main reason why Loeb decided to wash his hands off the company. There is little hope for Sony for the next quarter too, according to Alpeyev.
“[…] I am afraid there is not going to be good news for the investors at the 2Q results. Aftera first quarter surprise profit, the consensus among the analysts is for more than a $100 billion in loss for 2Q. The focus will be on the extent to which the positive news from the entertainment business and PlayStation 4 outweighs the bad news in smart phones, and as you have seen in Samsung earnings in the most recent quarter, there is a dark clouds in the horizon […],” informed Alpeyev.
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