Sony's Stock Jumps Following Report Dan Loeb Is Building A Position

Activist investor Dan Loeb and his Third Point hedge fund is accumulating a stake in Sony Corp SNE and could push the company to explore several strategic alternatives, according to a Reuters report.

What Happened

Third Point has already amassed a stake in Sony and is looking to raise $500 million to $1 billion in new capital to increase its stake in the Japan-based conglomerate, sources close to the matter told Reuters. The activist investor may be looking to push Sony to take a closer look at its movie studio, which attracted takeover interest from Netflix, Inc. NFLX and Amazon.com, Inc. AMZN.

Loeb also wants Sony to better explain how its semiconductor and insurance businesses fit in with the rest of the company, sources told Reuters.

Why It's Important

Loeb and his hedge fund are familiar with Sony's operations having owned around 20 percent of the company in 2014. A failed activist campaign that focused on convincing Sony to spin its entertainment division prompted Loeb to write to investors the business "remains poorly managed," Reuters said. He did change his tune later on and gave Sony credit for slashing costs and making necessary management changes.

What's Next

Sony transitioned its business over the past decade to become an entertainment company backed by stable revenue from music and video games, Reuters said. Moving forward, investors are looking for new sources of growth at a time when the PlayStation 4 console is approaching the end of its cycle.

Sony's stock traded higher by 6.8 percent at $46.06 per share at time of publication.

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