Should Sony Spin Off Its Image Sensor Business? One Investor Thinks So

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Activist investors are often the ban of any boardroom but that doesn’t mean that their ideas are always far fetched or wouldn’t benefit the company. One idea being floated around right now is that Sony should spin off its image sensor business into a separate company. That would be a bigger deal than it might sound like at first.

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Image by Brunox983

The activist investor is Daniel Loeb and he thinks that the proposed “Sony Technologies” spin off could be worth as much as $USD 35 billion within five years. This is because of Sony’s dominance in image sensors for everything from smartphones to vehicle backup cameras.

It is probably no secret that Sony is an absolutely massive company with its hands in everything from entertainment like movies and music but also a huge presence in video games and VR technology. While a spin off is unlikely to happen, the whole scenario underscores just how powerful Sony has become in this area in the past decade.

One massive reason given for Sony to do this is that spinning off the semiconductor business could free up capital for it to better challenge entertainment industry rivals like Disney and Nintendo. Nonetheless, naysayers quoted by Reuters pointed out that such a company would rely upon smartphones for some 90% of its revenues which is not the best position to be in given the current trade climate (see also the current saga of Huawei).

Another aspect to keep in mind is that activist investors, first and foremost, work to drive the company stock value up and thus cash in on their investment so they might not be considering their proposal from every possible angle.

Do you have any insights you’d like to share? Let us know in the comments below. Thank you ahead of time for your participation!

[Reuters]

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Kehl is our staff photography news writer since 2017 and has over a decade of experience in online media and publishing and you can get to know him better here and follow him on Insta.

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