Shares of Japanese electronics conglomerate Sony surged Monday after a report that Daniel Loeb’s hedge fund Third Point is building a stake in the company and plans to agitate for changes.
The stock soared more than 6% in morning trading after Reuters reported that Third Point is raising an investment vehicle to generate between $500 million and $1 billion so it can continue to buy Sony shares.
Third Point, which oversees about $14.5 billion in assets, declined to comment on this article. Sony did not respond to CNBC’s request for comment. Reuters did not learn the size of Third Point’s current position in Sony.
The reported stake represents the second time in six years the hedge fund has targeted Sony, which has over the years ceded its leadership in the electronics space to the likes of iPhone maker Apple and other consumer-focus technology companies.
The company’s stock was down more than 10% in the last 12 months prior to the Reuters story.
However, Third Point does hope Sony will consider certain strategic options for some of its business segment. The hedge fund believes that Sony’s movie studio has garnered takeover interest from the likes of Amazon and Netflix, sources familiar with the situation told Reuters.
During Loeb’s 2013 battle against Sony, the manager was particularly critical of its entertainment segment, which he deemed “poorly managed.”
At that time, the billionaire activist for months pushed Sony to spin off the entertainment unit as the Japanese firm struggled against more innovative competitors. Sony later rejected Dan Loeb’s call for a spin-off, saying in a letter that the board and management team “strongly believe that continuing to own 100 percent of the company’s entertainment business is fundamental to Sony’s success.”
For the original Reuters report, click here.