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HTC shares fall to new low despite award won by VR device in Germany

HTC shares fall to new low despite award won by VR device in Germany

Taipei, Aug. 21 (CNA) Shares of Taiwan-based smartphone vendor HTC Corp. (???) came under pressure to fall to a new low Friday as there have been no signs that the company will make a turnaround any time soon after its large losses in the second quarter and a gloomy outlook for the third quarter, dealers said. Amid concerns over the vendor's bottom line, investors tended to ignore an award for "Best Hardware" won by the HTC Vive, the virtual reality (VR) headset, this week at Gamescom, a trade fair for video games held annually in Germany, they said. While HTC is gearing up to grasp a share in the VR headset business by launching the HTC Vive, it remains to be seen whether its efforts in VR device development will strengthen the smartphone vendor's profitability, they added. The HTC Vive was developed with U.S. video game supplier Valve. Shares of HTC fell 10 percent, the maximum daily decline, to NT$44.55 (US$1.36) with 28.62 million shares changing hands on the Taiwan Stock Exchange, where the weighted index ended down 3.02 percent at 7,786.92. The stock faced tremendous downward pressure soon after the local main board opened as the broader market was hit by turmoil in the global financial markets amid concerns over demand at a time of a slower-than-expected pace in the world's economic recovery, dealers said. Selling in HTC shares escalated to push down the stock by 10 percent at the end of the session, as investors' confidence in the smartphone vendor's operations has been eroded by its latest financial results, they said. After the close, there have been orders placed by investors to sell an additional 617,000 HTC shares, indicating further losses are possible. In the second quarter, HTC posted a loss per share of NT$9.7 due to a massive one-time charge for idled assets and prepaid expenses, while slowing global demand for smartphones was also cited as a factor in the second quarter losses. HTC has anticipated that it will incur an additional NT$5.85 to NT$5.51 in net loss per share for the third quarter amid fiercer than expected competition not only from Apple Inc. and Samsung Electronics Co. in high-end models but also from Chinese rivals, such as Xiaomi, in budget models. In terms of the HTC Vive, investors remained cautious about HTC's strategy to enter the VR turf as the market has expected the new business will yield only limited benefits to the smartphone vendor in the near term. To boost its visibility in the VR device business, HTC has spent more than NT$300 million to invest in WEVR, a VR content developer in the United States, while having kicked off a world tour to market the HTC Vive. (By Esme Jiang and Frances Huang)


Updated : 2021-09-29 00:22 GMT+08:00