What has been in rumours from past few days, came out to be true. Beats Electronics founded by American rapper and musician Dr. Dre and musician Jimmy Lovine got back the 24.84% stake which HTC purchased in 2011. Originally, HTC purchased 50.1% but later in mid 2012 sold half of its stack, which resulted in net loss of $2.4 million for HTC.
Yesterday, HTC announced today that Beats Electronics will buy back the remaining
25 percent stake it had in the headphone maker for $265 million, all but
bringing to an end a two-year partnership that has never really worked
out.
As of right now, HTC is a perilous situation. The company’s sales
revenue is down, profits are down, operating cash flow is now negative
and more than a few pundits have already written the company off (or are
close to doing it). Worse yet, the HTC One is nearly universally
praised as the best Android phone available, yet the sales numbers do
not reflect the title. They built the phone everyone wanted, yet can’t
get anyone to buy it.
Beats, on the other hand, has recently embarked on a global expansion,
broadening its product lines beyond headphones and its exclusive mobile
partnership with HTC to include speakers, in-car audio systems, and soon an online music streaming service. Though HTC said that it will continue to be partners with Beats if any opportunity arises in future.
By selling back its remaining portion of Beats, the company bought a little more time out of the deadpool.
HTC Corp closed down 2.99% on the day, ending at NT$130 on the Taiwan Stock Exchange. Nevertheless, we hope for tables to turn for this Taiwanese giant get back to its heights which it was few years back.
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