Why It’s Time for Sony Corporation (ADR) (SNE) to Break Up

Creating a new phone will keep Blackberry in the game against Apple Inc. (NASDAQ:AAPL), whose iPod, and later iPhone, created a renaissance for a company that looked all but defeated just a short decade ago. Similar to Blackberry, and potentially to Sony Corporation (ADR) (NYSE:SNE) as well, Apple’s inventors and managers knew that their business was in computers and interconnectivity. This was what got Apple Inc. (NASDAQ:AAPL) into the computer battles of the 1970’s and 1980’s with Microsoft. By going back to that, after a tough 1990’s and early 2000’s, Apple was able to not only re-establish itself as a tech heavyweight, but also as a cultural icon, a status symbol for the cool and trendy, and a gold mine for investors. Sony needs to get back to being that icon, which it had in the early days of video games with the PlayStation dynasty, and to do that, separating from the movie wing of the company may be the best possible step going forward.

The potential split-up of Sony Corporation (ADR) (NYSE:SNE) into an electronics division and an entertainment division has thus far been met with positivity from investors. Selling 20% of the business through an IPO, which is what Mr. Loeb desires, could give Sony the flexibility to innovate and update its electronics division, especially ahead of the much-anticipated release of PlayStation 4. The stock even jumped 10% upon the news of the potential break-up, a good indicator for Mr. Loeb.

Allowing Sony Corporation (ADR) (NYSE:SNE) to stick to what it does best will help the company in the long run. It may still struggle a bit against Apple Inc. (NASDAQ:AAPL), but an uptick in the stock would make it a nice addition to a portfolio if the deal goes through. Like Blackberry, Sony should do what it does best: electronics and gadgets, for this is the way the company will prove it can still mambo with the cool kids.

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