Daniel Loeb won't have Sony to kick around (or profit from) anymore

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Simon Dawson | Bloomberg

Daniel Loeb confirmed in a letter to Third Point investors that his hedge fund has exited an equity position in Sony after earning at 20 percent return on investment.

Annlee Ellingson

Staff Writer- L.A. Biz

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A stinging thorn in Sony's side has been removed. Daniel Loeb has sold his stake in the company. The activist investor confirmed in a letter to Third Point investors that his hedge fund has exited an equity position in the conglomerate after earning at 20 percent return on investment.

Loeb notoriously lobbied for Sony to spin off its entertainment unit, harshly criticizing the studio for summer flops "After Earth" and "White House Down." The company declined to act on Loeb's suggestions but cut $100 million from its budget and made some major managerial changes.

"While we are most focused on the potential upside available to shareholders if management undertakes changes, we are unlikely to make a significant investment in a situation where constructivist-driven change is the chief catalyst unless we see minimal downside," Loeb wrote in his investor letter. "Sony was exactly the type of investment where the risk/reward ratio was skewed in our favor. Thanks to this investment principle, despite enduring profit warnings nearly every quarter we were invested, incurring worse news about electronics than we expected, and suffering from market disappointment at the pace of Japanese macroeconomic reforms, we still managed to generate nearly a 20 percent return on this investment before exiting."

Loeb invested in Sony in May 2013 and at one point was its largest shareholder with a 7 percent stake in the company.