LONDON: Investors in HTC decided in trading in Taipei that the Taiwanese smartphone maker’s brand was effectively worthless.
The company’s stock fell as low as 56.80 new Taiwan dollars before closing at 57.50 new Taiwan dollars in Taipei on Monday, Bloomberg reports.
HTC’s market value actually fell to below the 47.2 billion new Taiwan dollars ($1.5 billion) it had in cash at the end of June, meaning investors saw no value in the HTC brand or the factories or other assets the company possessed.
That makes HTC a very cheap acquisition target. HTC was once the best-selling smartphone brand in the US.
Were it to boost sales, the company may be able to regain some ground. But its forecast for third-quarter sales is as much as 48% below analyst estimates, Bloomberg reports, which means this isn’t likely to happen anytime soon. Sales have fallen by more than 75% since 2011, when the company had a market capitalisation of 900 billion new Taiwan dollars.
Since then, HTC has struggled in the face of stiff competition from Samsung as well Chinese brands such as Huawei, which is selling a lot of mid-range phones. There are simply too many Android brands on the market right now, and some, like LG, are making only 1.2 cents in profit per handset sold.
The company plans to cut costs and focus on the high-end market to boost profits, Bloomberg reports, but analysts don’t see these changes turning the company’s fortunes around in the next two years.
