Taiwan phone maker HTC announces plans for £144m of share buybacks
The world’s fifth-largest smartphone manufacturer, High Tech Computer Corporation (HTC), yesterday said it was planning to buy back up to 15m shares in a deal worth £144m
Analysts said the buyback was intended to halt its slipping share price.
Taiwan based HTC said that the buyback plan would “maintain the company’s credibility and safeguard shareholders’ interests”.
The company’s shares have fallen 40 per cent since June 2009 in the face of mounting competition and price cuts.
HTC is competing with giants like Motorola and Apple for a slice of the global smartphone market, which is expected to grow by at least 20 per cent in 2010.
“At this level, HTC has no choice but to implement this share buyback. Investors are losing confidence in the company very quickly, especially in the face of rising competition,” says Bonnie Chang, an analyst at Yuanta Securities.
But Richard Windsor, global technology specialist at Nomura Securities said: “Honestly, I don’t think the buyback is going to turn around HTC’s share price.”
“HTC has been generating excess cash and it is just time it handed it back to the shareholders,” he added.
Motorola recently overtook HTC in market share for smartphones running on Google’s Android operating systems.
But HTC is still the market leader in the windows mobile phone segment.