AH HTC One M9 2015 Chris --66

HTC Stocks Drop to Even Deeper Lows, Future in Question

June 9, 2015 - Written By Nick Sutrich

It’s never a great position when a company’s stocks drop consistently and quickly, but that’s what’s been happening to Taiwanese smartphone manufacturer HTC over the past couple of weeks.  Since reaching a one-year high back in Mid-February, HTC’s stocks have plummeted to all time lows in the past week in particular.  Coming off of an earnings meeting and announcing that new phones would be coming by the end of the year, it wasn’t but a few days later that the stock for HTC dropped to all-time lows for that time.  Now we’re looking at even deeper lows than before, something that’s now making the tech world wonder if HTC could be forced into becoming a private company.

Specifically looking at the market this week Monday’s trading session saw HTC shares fall 9.91%, followed by another 9.93% drop by the close of the market on Tuesday.  This brings HTC’s market capitalization down to a paltry $62.2 billion NT ($2 billion USD).  While this is a lot of money for the average consumer it’s relatively nothing for a big multi-national corporation like HTC who has to make orders, manufacture devices and make payroll regularly.  This marks a near 30% drop in company stock since the start of the month nine days ago, from NT$103.50 to NT$75.30, and a full 50% down from the one-year highs reached in mid-February.

Looking at the shares and what this all means for HTC, it appears that investors have lost all faith in the company’s ability to turn things around.  While the HTC One M7 was a huge change for the company a few years ago, sales of the One branded devices haven’t been anywhere near what was hoped for.  Subsequent released in the M8 last year and the M9 this year have only been met with lukewarm response, both in critics eyes and in consumer mindshare and sales.  While there’s no doubt that HTC makes some incredible devices with quality hardware and software, something the company is doing isn’t resonating with buyers.  It’s entirely possible that they could use part of the cash they have on hand, valued at around $1.7 billion USD, to buy back stock and go private.  This would give the new CEO Cher Wang more control over how the company sets its future, and could be the key to turning things around.