HTC Stock Move Prior to Apple Deal Probed by Taiwan Exchange

Taiwan’s exchange is looking at the unusual trading volume and price movements in HTC Corp. (2498) stock before the announcement of a patent settlement with Apple Inc. The shares fell for the first time in six days.

The investigation is a standard procedure and “isn’t necessarily related to insider trading,” Michael Lin, a spokesman for the stock exchange, said today. The disclosure of the Apple settlement on Nov. 11 will be taken into account, he said. HTC conducts “regular compliance training on insider trading stipulations,” it said in a statement late today.

HTC climbed 6.9 percent on Nov. 9 as 26.7 million shares changed hands, more than double its daily average this year, according to data compiled by Bloomberg. The stock fell 6.9 percent to NT$225 in Taipei today, snapping a five-day, 25 percent surge.

Apple (AAPL) settled all global lawsuits with HTC, which makes smartphones using Google Inc.’s Android software, and the companies signed a 10-year licensing deal, according to a Nov. 11 joint statement. Apple, the world’s most-valuable company, had accused HTC of copying features that made its iPhone unique.

HTC doesn’t expect the deal to have an “adverse material impact” on its financials, according to the statement today from the Taoyuan, Taiwan-based company. Apple will probably receive $6 to $8 per phone, or $180 million to $280 million a year from HTC, Shaw Wu, an analyst at Sterne Agee & Leach Inc., wrote in a research report yesterday. Apple declined to provide settlement details.

HTC, maker of the One, Desire and Sensation handsets, saw its share of the global smartphone market fall to 5.8 percent in the second quarter from a peak of 10.7 percent a year earlier, according to Bloomberg Industries data.

Apple, based in Cupertino, California, was second with 16.7 percent. Samsung Electronics Co. was first.

To contact the reporter on this story: Debra Mao in Taipei at dmao5@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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