Daniel Loeb Comments on Sony
Sony started 2014 strongly at the Consumer Electronics Show in Las Vegas, winning two best-of-show awards for PlayStation 4 and the Xperia phone. The show's highlight was news that Sony had sold 4.2 million Playstation 4's in 2013 versus 3.0 million Xbox One's. Sony appears set to sustain strong global momentum with the Japanese launch of the Playstation 4 in February. February is also rumore d to mark the launch of Sony's Xperia Z2 phone, with the potential for meaningful distribution expansion in North America and elsewhere.
Progress on Sony's growth vectors, while encouraging, needs to be matched by a serious effort to restructure the PC and TV businesses as well as more concerted efforts to realize Entertainment 's value.
Japanese investors reacted favorably to management teams who took bold restructuring action in 2013, and the market is looking for Sony to pursue a similar path.
Meanwhile, we are focused on upcoming catalysts including the IPO of Japan Display indicated for 1Q ' 14, progress at VEVO, and increasing focus on Sony's considerable intellectual property portfolio. Sony, a perennial top 10 U.S. patent approval recipient (#4 in 2013) with over 50,000 patents and several distinct patent assets, including stakes in InterTrust, MobileMedia Ideas, and participation in the Rockstar Consortium, still exhibits a disconnect between the implied value of the Electronics business and the underlying value of its intellectual property.
All eyes are focused on management to reach its margin targets both within the Electronics and Entertainment divisions over the course of the coming year. We have high hopes for CEO Hirai and his lieutenants to continue their path towards greater profitability and to make difficult decisions when necessary to reach those goals
From Daniel Loeb (Trades, Portfolio)'s Third Point fourth quarter 2013 commentary.