Sony stock leaps on buybacks, partnership
By: Carleton E.
Investors sent shares of Sony up more than 4% Thursday after the electronics maker issued a one-two punch of good news, including plans to double down on its newly launched stock buyback program.
The Tokyo company Thursday announced plans to spend as much as 200 billion yen, or $1.8 billion dollars, buying back 4.8% of the company’s stock through March 2020.
The announcement comes just months after Sony completed its first-ever buyback — spending 100 million yen, or just under $1 billion, to gobble up 1.5% of the company’s stock.
Separately, Sony unveiled a partnership with Microsoft to bolster their video game streaming and other streaming services. The companies, which operate rival video game console systems, say they plan to collaborate on cloud-based technologies for streaming games and other media. They also plan to join forces on other techie projects, like chips tied to image sensors.
“By working together, the companies aim to deliver more enhanced entertainment experiences for their worldwide customers,” the companies said in a joint statement Thursday.
Shares of Sony popped 4.1% to close at $52 a share on Thursday. Seattle-based Microsoft stock gained 2.3% to close at $128.93 a share.
The buybacks come amid renewed pressure from activist investor and onetime Sony enemy Dan Loeb, who is pushing Sony to shed noncore assets, like its semiconductor and insurance divisions, in a bid to boost the stock price.
Loeb, whose Third Point hedge fund manages around $14.5 billion, has not publicly acknowledged a stake in the company, but a source familiar with Third Point’s thinking told The Post that the hedge fund shop is pleased with Thursday’s announcements.
“This is a message that investors shouldn’t sell Sony just because the rest of the market is falling,” Makoto Kikuchi, founder of Myojo Asset Management Co., told Bloomberg of the buybacks. “It’s also a message that says Sony is still cheap compared with the company’s actual earnings,” Kikuchi said.
Sony’s new chief executive, Kenichiro Yoshida, has been placed at the helm at a time of tumultuous economic and market conditions. The company has secured two consecutive years of record operating profit but has not seen its share budge much in the year since Yoshida took over.
Meanwhile, Sony is struggling with fewer blockbuster video game titles and potential headwinds from a US-China trade war.
Loeb first targeted the electronics maker in 2013, pushing it to sell its film studio unit in a move that earned him a public tongue-lashing at the hands of Hollywood A-lister George Clooney, who called him a “carpetbagger.”
As The Post reported last week, Sony has welcomed Loeb’s ideas this time around — even going so far as to hire investment banks Goldman Sachs and Lazard to assess ideas that could create value for the company.
