- Sony shares rose 7% as investors welcomed the new president’s remarks on the company’s growth strategy.
- The plan includes considering a partial spin-off and the division of its financial services arm to strengthen investments in entertainment-related businesses.
- This move is aimed at unlocking the company’s value and retaining a 20% stake while heading into a related two- to three-year time frame.
The shares of the Japanese conglomerate Sony rose 7 percent this Thursday and the increase has an explanation: lInvestors welcomed a statement from the new president, Hiroki Totoki, who spoke about the company’s growth strategy.
Indeed, Sony said they were considering de-listing the shares of their financial services arm to strengthen investments in their entertainment-related businesses.
Almost immediately after Totoki’s press conference, shares in the Japanese holding company rose, showing that investors welcome the idea because it could unlock the company’s value.
Sony’s idea is to retain a stake of around 20 percent and aim for a time frame of two to three years for the relisting of the shares, publishes the Financial Times.
In 2020, Sony invested $3.7 billion to take full control of its financial unit, which includes the holding’s online banking and insurance business, despite pressure from some investors, especially American ones, who wanted it to Focus on entertainment.
However, at the press conference on Thursday, May 18, the recently appointed president, Totoki, said that it was A “partial spin-off” of the financial arm is necessary to give greater impetus to investment capabilities.
“In order to grow our business in the medium and long term, we are going to need a greater capacity to invest in areas such as image sensors, for example,” explained Totoki.
Sony has been growing in entertainment since the late 2010s buying EMI Music Publishing for $2.3 billion and AT&T’s anime streaming service Crunchyroll for another $1.2 billion.
Sony and its global growth strategy
In October 2020, Sony announced its decision to purchase the stake it did not own in Sony Financial Holdings, a group of financial services companies that included Sony Life Insurance, Sony Bank and Sony Assurance.
The acquisition, which was completed in early 2021, solidified Sony’s control over its financial arm, allowing for a more unified and strategic approach, but anchored the holding company’s growth possibilities.
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