Originally posted by Rondec The interesting thing to me was that it was a different Hedge Fund (Third Point LLC) that forced Sony to sell those shares. Even big Japanese Corporations with plenty of revenue are susceptible to foreign leverage.
’Third Point primarily invests in public equity, fixed income, and ADR markets globally and deploys an investment strategy that capitalizes on companies “undergoing events such as spinoffs or bankruptcies and pushes for corporate change", meaning they accumulate large positions is good companies that have underperforming operations or for which the value of certain operations are not reflected in the stock price. They should be characterized as an activist investor, more a REgistered Investment Advisor than a true Hedge Fund (though that has become a Broad label).
Third Point accumulated 6.5% of Sony shares when the price was down some years ago, and negotiated three Board seats. They wanted Sony to sell or spin out the entertainment division, which Sony refused to do, but they did quietly make a number of changes suggested / demanded by Third Point.
Sony
did rationalize its operations and has done much better since Third Point took its position, so they actually helped existing shareholders while helping themselves. There’s a world of difference between that and dismantling the company as was done to Pentax.
Third Point has returned 15+% per year - compounded - since inception inn 1995, or a double every 5 years.