Activist investor Dan Loeb has stepped up his campaign to force Sony into spinning off its entertainment group in an investor letter.
Loeb’s hedge fund Third Point owns around seven per cent of Sony. While he says the company as a whole is “significantly undervalued”, the entertainment division is “poorly managed, with a famously bloated corporate structure, generous perk packages, high salaries for underperforming executives and marketing budgets that do not seem to be in line with any sense of return on capital invested”.
Keeping Entertainment underexposed, undervalued and underperforming is not a strategy for success.
He said Sony’s chief executive Kazuo Hirai’s reaction to box office flops like After Earth and White House Down – “I don’t worry about the Entertainment business, it’s doing just fine” – was “perplexing”.
Back in June, Hirai said he would consider Loeb’s proposal, but said he would not move to hastily.
Here's the letter in full: