HTC shares continue freefall, market value falls below cash on hand

Posted:
in General Discussion edited August 2015
Taiwanese gadget maker HTC, once one of the biggest names in the smartphone market, is now considered essentially worthless by investors as its market value fell below its cash on hand during Monday trading.




HTC stock bottomed out at NT$56.80 ($1.80) per share on Monday --?eventually closing at NT$57.50 -- while the company holds NT$57 per share in cash. In effect, this means that investors do not believe HTC has any intrinsic value as a going concern.

The plunge was first noted by Bloomberg.

Despite garnering generally favorable reviews for its handsets, such as its current flagship One M9, HTC has found itself unable to fend off competition from Apple and Samsung at the high end and cheap Chinese brands at the low end. A recent expansion of its product line --?with the release of the handheld Re camera --?and an executive shakeup that saw cofounder Cher Wang take the reins as CEO have not been enough to convince investors that the company can be salvaged.

With HTC in seemingly dire straits after warning investors of continued losses in its third fiscal quarter, layoffs and cost-cutting have become the order of the day.

"The cuts will be across the board," HTC CFO Chialin Chang told Reuters last week. "They will be significant."

Some have also suggested that its weakened financial position may make HTC a prime acquisition target, though the company's largest asset --?its brand --?has also lost its luster. Earlier this year, HTC's smartphone market share was estimated to have fallen below 2 percent globally.
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Comments

  • Reply 1 of 118
    HTC and every other Android manufacturer deserves to lie in the bed they've made. Stagefright is just the latest and biggest torpedo to slam into the hulls of sinking Android ships. https://torusoft.com/blog/persona-non-grata
  • Reply 2 of 118
    cornchipcornchip Posts: 1,246member

    Microsoft should buy them. /s?

  • Reply 3 of 118

    Up next: Xiaomi.

  • Reply 4 of 118
    jungmarkjungmark Posts: 6,661member
    How can we spin this as a negative for Apple. Ooo: Could HTC be the harbinger of Apple's decline?

    I had an HTC phone. It was nice but Android ruined the experience.
  • Reply 5 of 118
    sflocalsflocal Posts: 4,498member

    Android is a sham of an OS.  That's a given.  That being said, if I ever received blunt-force-trauma to the head, I would have considered HTC.  With all the iPhone clones being cranked-out by Samsung and Xiaomi, at least HTC "tried" to differentiate itself so I have to at least give them credit for that.



    Xiaomi and Samsung would be my dream-list of "former" phone-manufacturers.  With Xiaomi being in bed with the Chinese government, I don't see them being left out on the vine to rot anytime soon.

  • Reply 6 of 118
    Quote:

    Originally Posted by sflocal View Post

     

    With Xiaomi being in bed with the Chinese government, I don't see them being left out on the vine to rot anytime soon.


    It is well-known that Huawei is. I am not sure about Xiaomi.

  • Reply 7 of 118
    larryalarrya Posts: 544member
    These flailing Android manufacturers should all decide at once to start making Windows phones. Not that I'm a big Windows fan, but the writing is on the wall for Android, and together they could get to a critical mass for Windows and actually start making a little money.
  • Reply 8 of 118
    Quote:

    Originally Posted by cornchip View Post

     

    Microsoft should buy them. /s?




    Microsoft makes over a billion dollars per year from HTC due to royalty payments. No reason to spoil that.

  • Reply 9 of 118
    bocboc Posts: 72member
    The Internet is increasingly making it difficult to sell crap.
  • Reply 10 of 118
    gatorguygatorguy Posts: 20,282member
    The biggest issue seems to be the multitude of models in the market, thousands of them, which ends up being defined by who can go the lowest on price. HTC was one of the worst, tho they've recently recognised their model overkill and pledged to focus on just a few handsets going forward. Others like Samsung should do the same IMO. Stop trying to underprice each other and instead concentrate on just a very few good models for specific price points or specific markets.
  • Reply 11 of 118
    "Blah, blah, blah..."
    I guess Mr. Oldman didn't reverse their slide.
  • Reply 12 of 118
    cornchip wrote: »
    Microsoft should buy them. /s?

    After digesting and pooping out the remains of Nokia, they are probably full for a while.
  • Reply 13 of 118
    Google wants cheaper Android smartphones for the India smartphone market. Build a good $50 smartphone and you can't lose as a manufacturer. Android is going to lock the iPhone completely out of the smartphone market in India. Market share is everything.

    /s
  • Reply 14 of 118
    fallenjtfallenjt Posts: 3,976member

    HTC is a joke from day 1. Oh, tried to copy Apple for fingerprint reader, but failed to secure it: they stored fingerprint in image file...unencrypted. How stupid it that?

     

    http://www.theguardian.com/technology/2015/aug/10/htc-fingerprints-world-readable-unencrypted-folder

  • Reply 15 of 118
    fallenjtfallenjt Posts: 3,976member
    Quote:

    Originally Posted by Steffen Jobbs View Post



    Google wants cheaper Android smartphones for the India smartphone market. Build a good $50 smartphone and you can't lose as a manufacturer. Android is going to lock the iPhone completely out of the smartphone market in India. Market share is everything.



    /s

    I like your /s. $50 hanset is POS anyway. BTW, Android phone makers sell phones at loss or little profit. What's surprise? LG make average 1.2 cent per phone. HTC actually give you money to take their phones.

  • Reply 16 of 118
    fallenjtfallenjt Posts: 3,976member
    Quote:

    Originally Posted by Gatorguy View Post



    The biggest issue seems to be the multitude of models in the market, thousands of them, which ends up being defined by who can go the lowest on price. HTC was one of the worst, tho they've recently recognised their model overkill and pledged to focus on just a few handsets going forward. Others like Samsung should do the same IMO. Stop trying to underprice each other and instead concentrate on just a very few good models for specific price points or specific markets.

    Look at Android phone market: it's chaotic and a mess. How many of them? 1000ish models for fandroids to select? LOL. HTC has around 50+ models. What about Samsung, LG and others? I lost counts.

  • Reply 17 of 118
    irnchrizirnchriz Posts: 1,581member
    Buy shares back, go private?

    Then stick to a couple of handset models and stop selling crap little ones.
  • Reply 18 of 118
    thomprthompr Posts: 1,511member
    Quote:
    Originally Posted by irnchriz View Post



    Buy shares back, go private ?

     

    Much harder than it sounds, especially when your market cap is ginormous and many people expect it to go higher.



    When a company attempts to go private, they typically have to offer the current shareholders a premium.  I know that I, for one, have high hopes for AAPL's future share price, so I would not vote for anything less than a 50% premium.  I can't speak for all shareholders, but I think that a 30% premium may end up in the vicinity of what it would take.

     

    Where would Apple get the backing to go private?

  • Reply 19 of 118
    fallenjt wrote: »
    Look at Android phone market: it's chaotic and a mess. How many of them? 1000ish models for fandroids to select? LOL. HTC has around 50+ models. What about Samsung, LG and others? I lost counts.

    Around 24,000 devices from almost 1300 manufacturers.

    http://fortune.com/2015/08/05/apple-android-fragmentation/
  • Reply 20 of 118
    irnchrizirnchriz Posts: 1,581member
    thompr wrote: »
    Much harder than it sounds, especially when your market cap is ginormous and many people expect it to go higher.


    When a company attempts to go private, they typically have to offer the current shareholders a premium.  I know that I, for one, have high hopes for AAPL's future share price, so I would not vote for anything less than a 50% premium.  I can't speak for all shareholders, but I think that a 30% premium may end up in the vicinity of what it would take.

    Where would Apple get the backing to go private?

    We are talking about HTC here, not Apple.
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