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Sony Stock Spikes: Has Daniel Loeb’s Third Point Bought a Stake?

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Daniel Loeb buying a stake in Sony

Today, Reuters reported—citing unnamed sources—that Daniel Loeb’s Third Point is buying a stake in Sony Corporation (SNE) to push for changes. This is the second time in the last six years that Loeb has targeted Sony. Reuters also reported that Third Point is raising a dedicated investment vehicle targeting between $500 million and $ 1 billion in capital to purchase more stakes in Sony.

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Sony’s stock spikes

Sony’s stock has spiked 7% by 11:50 AM ET on these reports. Third Point has been instrumental in bringing about change at other companies through its activist stake.

SNE has lost 10.8% year-to-date as of April 7. Its peers (QQQ) Facebook (FB), Amazon (AMZN), and Apple (AAPL) have gained 34%, 22.3%, and 24.9%, respectively.

Sony’s lost glory

Sony was once a market leader in consumer electronics but is now lagging behind its peers. Its previously thriving gaming business (GME) is also under pressure. Google’s (GOOGL) recent announcement about pushing into the gaming business with a cloud-based offering increased pressure on gaming stocks, including Nintendo (NTDOY) and Sony.

Sony’s popular PlayStation 4 console demand is also weakening. In February, the company reported weaker profits in this business and also cut its annual revenue forecast. Its stock fell more than 8% in Tokyo after this announcement. The rapidly expanding mobile gaming segment is weighing on the stock, too.

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