HTC Stock Bounces Upward On Rumors (UPDATE)

by Ian Hamilton • January 18th, 2016

Update: HTC provided the following statement on its investors page.

Recent media reports in Taiwan, such as by United Evening News, stating that Cher Wang is planning to spin off HTC’s VR operations into an independent entity that will be wholly owned by Wang is incorrect. HTC will continue to develop our VR business to further maximize value for shareholders.

Earlier:

HTC declined to comment on rumors it is considering spinning off the Vive VR headset into a separate company to separate it from the sinking of its Android phone business. HTC’s stock bounced upward on the rumors nonetheless.

HTC is traded on the Taiwan Stock Exchange and dropped down to around $1.20 per share last August, around the time it announced huge cost-cutting measures to account for disappearing revenue from its Android phones. The stock rose through the rest of the year but has been fluctuating a lot, and with the rumors of the spin-off emerging this week the stock bounced upward around five percent to around $2.28. If you look at the company’s stock price over the last five years it is not a pretty story.

HTC 5 Years Stock

A spin-off of the Vive business is an interesting idea as it might allow HTC a chance to still ship the room-scale headset even if its phone business becomes a thing of the past. It would be a major loss to the VR competitive market if the room-scale tracking technology Valve engineered for Vive didn’t make it into consumer’s hands and on their heads.

Valve is a private company and its finances are unknown but the Steam store it operates for PC game downloads is presumed to be highly lucrative. Is it possible for Valve to help HTC come up with the money necessary to ship the headset?

HTC still hasn’t released a price for the Vive though the headset is expected to be made available for pre-order at the end of February. The device is slated to ship in April.

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