HTC shares down as share buyback program nears end
CNATAIPEI--Shares of Taiwan-based smartphone vendor HTC Corp. came under pressure Friday, underperforming the broader market, as investors feared the company's efforts to prop up its share price will diminish with its current share buyback program nearing an end, dealers said.
September 28, 2013, 12:05 am TWN
Selling also reflected lingering concerns that HTC will not be able to reach its third quarter sales target amid escalating competition from its major rivals such as Apple Inc. and Samsung Electronics Co., which have launched new models to compete for a larger market share, the dealers said.
Shares of HTC fell 2.99 percent to close at NT$130.00 (US$4.39) with 13.65 million shares changing hands, while the weighted index on the Taiwan Stock Exchange ended up 0.56 percent at 8,230.68 points.
HTC announced in early August that it would repurchase 15 million of its own shares from the open market at a price range between NT$140 and NT$290 from Aug. 5 to Oct. 4.
Market analysts said the share repurchasing program is coming to an end soon, so investors fear that without the company's support, HTC shares will continue a downward spiral.
“In fact, the current share buyback program failed to spark strong interest in HTC shares as market sentiment toward the stock remained haunted by concerns over the company's sales,” MasterLink Securities analyst Tom Tang said, referring to Friday's closing price, which was still below the lower end of the buyback price range.
HTC launched the share buyback program after it released disappointing sales for July and August totaling NT$28.9 billion. Many investors have been afraid that the smartphone supplier will not be able to achieve its third-quarter sales target of NT$50 billion to NT$60 billion.