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Sony's String Of Flops Boosts Third Point's Case For Revamp

posted 1 Aug 2013, 03:14 by Mpelembe Admin   [ updated 1 Aug 2013, 03:15 ]

 

Reuters Business  Report - Ah Kazuo, you've been on a good run: the well-received PS4 unveil, a smartphone resurgence, promising new 4K TVs, and of course a free ride from the falling yen.

Add on today's earnings - coming in better than forecast - it's almost been enough to keep your persistent top shareholder Daniel Loeb and his pesky movie unit spin-off plans at bay.

But then you let your Sony pictures execs sign off on this: After Earth, a poorly-received Will Smith vehicle designed to propel his charisma-deficient offspring onto the action-star fast-track.

That failed, predictably.

Costing an estimated 230 million dollars to make and market. The opening weekend take at home? Just 27 million dollars.

And then you came up with White House Down - a near carbon-copy of another blockbuster this year where terrorists yet again take over Capitol Hill in a film that looks less like something from the world's #1 picture studio and more like a Steven Seagal direct-to-Netflix special.

What over-the-top script are you going to greenlight next?

Deep in Chinese Hong Kong, one reckless reporter out to prove himself is trusted with the darkest secrets of a fugitive NSA whistleblower. Now he has to race against the clock to unveil the secrets of a global telecommunications monitoring scheme that records our every online action or conversation. Nah... who's got the attention span for that? Maybe if we throw in some big explosions it will sell.

The movie stumbles have given fresh ammunition to Loeb, in a less diplomatic letter that reads like a harsh Rotten Tomatoes film review.

Let's see. We've got "high salaries for underperforming executives" in a "poorly managed" picture unit, with marketing budgets that aren't "in line with any sense of return." Ouch.

Sony's share price is still riding high, not too far from the multi-year peak reached in May.

And a Reuters poll of analysts covering Sony shows on the sell-side it's pretty optimistic: all buy or hold ratings.

But with Kazuo and Sony's board still on the fence over Loeb's spin-off plans - and the activist fund manager himself signaling his patience is running thin - for investors, this might turn into one blockbuster actually worth buying a ticket for this summer.



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