HTC shares jump above NT$80 on buy-out hopes
Shares of Taiwan- based HTC Corp. ( ) soared Monday morning to NT$ 80 ( US$ 2.58) on acquisition hopes for the smartphone vendor, which has been experiencing operation difficulties, dealers said.
The buy- out hopes arose after Asustek Computer Inc. (
) , one of Taiwan’s leading PC vendors, said June 12 that it did not rule out of the possibility of acquiring HTC.
Monday’s buying also reflected the fact that foreign institutional investors had been purchasing HTC shares in recent trading sessions, taking advantage of a slump in the stock as a result of its poor earnings outlook, dealers said.
As of 11: 06 a. m., shares of HTC had climbed by the maximum daily 10 percent to NT$ 83.60, with 19.66 million shares changing hands. The weighted index on the Taiwan Stock Exchange was down 0.10 percent at 9,292.49 points.
“The buy- out leads simply prompted many bargain hunters to pick the stock this morning after the recent heavy selling on forecasts of massive losses for the period April to June,” Ta Ching Securities analyst Andy Hsu said.
On Friday, Asustek Chairman Jonney Shih ( ) told reporters that his company had held internal “informal” discussions about acquiring HTC.
Asustek has entered the turf of mobile devices, in particular budget smartphones, in a bid to offset the effects of a weak global PC market.
HTC declined to comment on Shih’s remarks, saying only that it would continue to hold on to the spirit of “pursuing excellence and perfection” and release amazing products to promote its brand around the world.
“It’s too early to say whether such an acquisition will take place, so I prefer to say that HTC’s current gains are technical in nature,” Hsu said. “With concerns over HTC’s profitability still remaining, the stock remains technically weak.”
HTC shares had suffered a heavy downturn since June 5 when it forecast a loss per share of NT$ 9.7- NT$ 9.94 for the April- June period, revising its earlier projection of NT$ 0.06NT$ 0.34 in earnings per share. Before Monday’s rebound, the stock had fallen about 18 percent from NT$ 92.80 at the close of trade on June 5.
After the revised forecast, several foreign institutional investors cut their target prices on HTC shares, and one European brokerage dropped its target price from NT$ 100 to NT$ 52, the lowest among the foreign brokerages that track HTC shares.
In the seven trading sessions prior to Monday, foreign institutional investors had sold a net 9.56 million HTC shares. Hsu said the data simply showed that foreign investors were buying the stock for trading purposes only, but the foreign purchases have motivated many other investors to buy into HTC shares.
“After the forecast of heavy second- quarter losses, HTC is unlikely to post a net profit for the entire 2015 so its share price may remain in the doldrums in the near term despite the latest technical rebound,” Hsu said.
A man uses a smartphone in Taipei, yesterday. Shares of the Taiwanese smartphone manufacturer HTC Corp. ( ) soared to NT$80 (US$2.58) yesterday morning after Asustek Computer Inc. ( ) announced that it has not ruled out the possibility of acquiring HTC.