Sony considers partial spin-off and listing of financial services unit
Shares of Japanese conglomerate rise 6% as investors welcome idea
www.ft.com
Report: Sony "to secure an additional $8 billion-ish dollars for proactive Merger & Acquisitions"
- Thread starter John Elden Ring
- Start date
www.ft.com
It's been said before that Sony doesn't necessarily have to wait on fiscal year budget allocations in order to gather funds for acquisitions. This further supports that.
Sony considers partial spin-off and listing of financial services unit
Shares of Japanese conglomerate rise 6% as investors welcome idea
This random Twitter user is wrong, Sony didn't say anywhere that they have plans to secure an additional $8 billion-ish dollars for proactive Merger & Acquisitions.
The linked article doesn't mention anything about that. It talks about Sony's decision of branching out their financial services division, and the budget they created in 2020 for acquisitions+investments+stock repurchases during a 3 years period that ends this March and that only has $140-$150M remaining after being reduced because they'll dedicate that money instead on image sensors division and extra servers for corporate R&D and the gaming division.
What Sony said a few days ago was that in the mid to long term they'll continue acquiring but not in short term due to recent market condition changes and because they want to consider more carefully their timing and acquisition valuations.
The opinion of a random Twitter user doesn't support anything. Sony decreased their acquisitions+investments+stock repurchases budget instead and there's only $140M left for this FY, and said that they will continue with acquisitions but in the mid to long term, not now.
Links with the official documents mentioning that are in the thread about their recent fiscal year report.
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You seem to really not like the idea of Playstation making major acquisitions, but they'll have to if MS keeps making moves that will permanently take away from their available games library. Also, I'm just saying that Sony don't have to wait on these F.Y. allotments to gain capital for acquisitions, which is objectively true. I'm not interested in picking apart another buzzkill dissertation attempt from you, lol.
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The article outlines the timeline... they intend to spin off the financial arm in the next year or so and for it to help them fund 'aggressive acquisition strategies for their sensors and entertainment' businesses in 2 - 3 years, so while they didn't say 8 billion exactly... they are right that they would be raising billions and it is consistent with what you said about being more mid-term to long-term when the investments will be made.
Yeah, any company can have special shareholder calls to approve changes to their capital investments.
As the article correctly says, "Three years ago, Sony spent $3.7bn to take full control of its financial unit" and "In the past five years, Sony has gone on an acquisition spree to expand its entertainment assets, buying EMI Music Publishing for $2.3bn and spending $1.2bn to acquire AT&T’s anime streaming service Crunchyroll."
These PAST acquisitions combined were $7.2B, maybe the made up $8-ish billions that the random user wrongly mentions comes from there.
The article mentions: “In order to expand our growth over the medium to longer term, we will need the ability to invest in image sensors and the entertainment business at a completely new level,” Totoki said.
In their recent fiscal report, Sony reduced the remaining acquisitions+investments+share repurchases budget for the 3 years period ending in March 2024 to around $140M mentioning that they were going to spend the removed money from that budget in their image sensors division and in servers for corporate R&D and their gaming division. This is the investment Totoki mentioned.
If instead of decreasing this budget Sony could also have increased it if desired to make more acquisitions or investments this FY, but it wasn't the case:
Totoki also mentioned when sharing the fiscal report that they'd continue acquiring but in the mid and long term, not now because there were some unfavorable recent market changes and because they wanted to improve their timing and valuations for future acquisitions.
Mid and long term in a corporate strategy context means years from now, at least minimum a year. Their current budget runs out in March 2024, so very likely they'll make a new one for the next 3 years period or simply won't make any new dedicated budget and instead will acquire, invest or repurchase stocks when desired.
We know Sony's plans, they are shown and explained in their fiscal year report and related presentation.
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That was a fear pre ABK block, but the consolidation thing is pretty much dead now. Sony needs to boost their first party output, I don't think 8 billion dollars will buy them anymore meaningful acquisitions for playstation players.
from console hardware, to acquisitions, to sales, to games, they just be check mating them everytime.
I'd be super happy to see Sony announcing in the showcase that they will buy Capcom, From Software or Square.
But being realistic and looking at the facts, what Sony did and said was that they reduced their acqusitions budget to around $140M for this year, to spend that removed money in something else (image sensors division + servers) and mentioned that they would leave the acquisitions for the mid and long term instead. Which means that they won't make unannounced acquisitions soon, at least this year.
I hope Microsoft takes this to court and use this as fuel, and if it's true then Sony is very hypocritical in their own arguments they made with the FTC and others, an eye for an eye. Want to make the market fair then Sony should think twice about making purchases. --- Before anyone comes at me yes I'm excited for Spider-Man 2.
With ABK hitting a snag with the cma, they can afford not to do anything this year I'll admit.
I always pointed out to CDPR as a publisher that would make sense for Sony.
Please let it be true!
They are at an all time low as far as price, Sony needs studios in Eastern Europe and a WRPG studio to counter Bethesda.
CDPR problems mostly came from the top leadership and not lack of talent, Sony would be in a perfect position to fix that.