Sony 2001 Annual Report Download - page 52

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Sony Corporation Annual Report 2001
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Sony Corporation Annual Report 2001
TRACKING STOCK
ISSUANCE OF TRACKING STOCK LINKED TO SONY COMMUNICATION NETWORK CORPORATION
Sony Corporation is proceeding with preparations to issue a new class of stock whose price would
reflect the economic value of Sony Communication Network Corporation (SCN), a wholly-owned
subsidiary of the Sony Group.
SCN is active in three main areas: as an internet service provider, as a supplier of content, and as a
provider of electronic commerce services. With the arrival of the era of broadband networks, SCN is of
considerable strategic importance as a wholly-owned subsidiary of Sony. Sony is positioning SCN as the
center for the Sony Group’s internet/communication service business. As such, SCN is aggressively working
to facilitate the network compatibility of Sony hardware, to construct network platforms, and to provide
content services that take advantage of broadband networks.
Sony believes that the creation of Tracking Stock is an effective way to facilitate decentralized/inte-
grated corporate management. While enabling the securities markets to place a value on strategically
important subsidiaries, Tracking Stock also preserves parent company control and maintains unity of group
strategies. These attributes of the Tracking Stock can add flexibility to SCN’s businesses and accelerate
growth, while concurrently preserving strong ties with other Sony Group members. For these reasons, Sony
believes that it can increase the value of the entire Sony Group through the use of such Tracking Stock.
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