HTC's woes continue. The struggling smartphone maker will be removed later this month from the main Taiwan Stock Exchange's FTSE TWSE Taiwan 50 Index, the main index in the country. The move not only reflects HTC's battered share price but how far the company has fallen in recent years.
As CNET notes, the index is a list of 50 highly valued Taiwanese blue chip stocks, and the firms in the index represent around 70 percent of the country's stock market. HTC will be replaced on Sept. 21 by elastic fabric maker Eclat Textile. According to the BBC, HTC's shares have plunged by more than 66 percent this year. Further, HTC's share price is now less than the cash the company has on hand, meaning that investors essentially think the company's value is virtually worthless.
There could be more ominous news on the horizon as well, as dropping out of the TWSE 50 index could push HTC's shares down further, since foreign investors are often reluctant to hold shares not listed on the main Taiwan index, according to the BBC.
HTC is taking drastic steps to turn its fortunes around. Last month the company said it plans to cut 15 percent of its workforce and slash operating expenses by 35 percent. HTC said it will cut about 2,250 jobs by the end of this year as part of its restructuring plan.
In the second quarter, HTC posted a net loss of around $246 million (8 billion New Taiwan dollars). HTC reported revenue of $1.01 billion in the quarter, around half of the $2 billion it had in the second quarter of 2014.
HTC said that it will establish new business units as it focuses on premium smartphones, virtual reality and connected lifestyle products. The company has said that it would produce fewer smartphone models, with a focus on the premium smartphone segment. HTC has tried to boost smartphone sales by pushing its mid-range Desire line; the phones in the line share many of the same design characteristics of its flagship One smartphone but are much less expensive. Yet as its smartphone sales have slowed, especially in China and in the premiums segment, HTC has branched out into other product areas.
However, late last month, HTC confirmed that its Vive virtual reality headset will not have a widespread commercial launch in 2015, as initially planned, with the launch slipping into 2016. HTC had previously said the Vive would be commercially released by year-end. HTC has said it has been working with more than 1,000 developers on content creation. However, HTC also delayed the launch of a fitness-focused wearable product and HTC CFO Chialin Chang said in August the company does not expect to record revenue from those products until 2016.
"HTC is an inspirational company driven by innovative people, with a unique blend of expertise in hardware and software integration, advanced technology and world-class design. Now, as we diversify beyond smartphones, we need a flexible and dynamic organization to ensure we can take advantage of all of the exciting opportunities in the connected lifestyle space," HTC Chairwoman and CEO Cher Wang said in a statement last month. "This strategic realignment of our business will ensure that each product group has the right focus, the right resources and the right expertise to win new markets."
For more:
- see this BBC News article
- see this CNET article
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