Sony Corporation is reportedly mulling over a proposal from a major shareholder Third Point LLC to spin-off its movie and music businesses. Reported by the Japanese daily newspaper Nikkei (via Reuters), the hope is to separate two of successful business units and use the funds to aid Sony’s struggling electronics division.

Third Point LLC investor Daniel Loeb last week stated last week that he hoped the money from the spin-off could be used to bolster Sony’s device-manufacturing unit. Loeb said that by allowing the company to fund improvements in its electronics operations, it would also provide its shareholders with an opportunity to be better connected with the profitable units by owning a piece of them directly.

When presented with the idea, Sony initially rebuffed it, releasing a statement indicating that the entertainment business is not for sale and that it is “trying to strengthen both that division and its electronics operations.”

The New York Times notes that shares in Sony have dropped nearly 85 percent over the last 13 years, leading many to believe that some form of a turnaround must happen if the company will remain competitive. It no longer is considered a company that produces “cool electronics”, having given that title to the likes of Apple and is suffering in other areas including televisions and phones.

Sony is a struggling company and needs to make some changes for it to improve its standing in the eyes of investors. Surely, people will be watching to see how the upcoming Playstation 4 will perform, given that it hasn’t even revealed what it looks like or what it will cost, just that it’s coming. However, as Microsoft revealed earlier today its next-generation Xbox game console, Sony surely needs this newest Playstation to work.

In its 2012 annual report, Sony said that it’s working to reinvent itself. Company President and CEO Kazuo Hirai said that “Sony will change.” He also revealed that only two of its three main business units, entertainment and financial services, are the most stable and “poised for future growth.” Its third area, electronics, isn’t as fortunate: “the operating environment remains harsh, with profits suffering from price competition resulting from product commoditization and the impact of persistently worsening foreign exchange rates.”

Sony has made it a priority in the next year to rebuild its electronics business. To achieve this, Hirai says it will focus on five initiatives: strengthening its core businesses in digital imaging, games, and mobile, turning around its television operations, expanding to more emerging markets, create new business, and realigning its business portfolio and optimize the use of its resources.

Whether Loeb’s proposal works remains to be seen, but it could also be a way for Sony to prevent the lackluster performance its electronics unit has from spreading to other divisions. In the end, money isn’t going to necessarily solve all of Sony’s problems — it needs to focus on innovating and producing products that its customers want to use. Anything short of that will just be Sony putting itself on life-support.

Investors certainly think that Loeb’s proposal is a good one. After news leaked about his idea, shares in the company rose more than 9 percent on the New York Stock Exchange.

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