HTC Follows BlackBerry to Smartphone Dead-End: Chart of the Day

Photographer: Maurice Tsai/Bloomberg

A customer tries out a HTC Corp. Butterfly S smartphone at one of the company's stores in Taipei. Close

A customer tries out a HTC Corp. Butterfly S smartphone at one of the company's stores in Taipei.

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Photographer: Maurice Tsai/Bloomberg

A customer tries out a HTC Corp. Butterfly S smartphone at one of the company's stores in Taipei.

HTC Corp. (2498), the smartphone maker that’s lost 90 percent of its market value since 2011, is still too expensive for potential buyers following acquisition deals for BlackBerry Ltd. and Nokia Oyj (NOK1V), said Yuanta Securities Co.

The CHART OF THE DAY shows Taoyuan City, Taiwan-based HTC trades at 1.4 times net assets, almost triple the 0.5 level of BlackBerry, the smartphone maker that agreed Sept. 23 to a $4.7 billion buyout. The lower panel shows the consensus ratings of analysts who follow HTC, BlackBerry and Nokia, which agreed last month to sell its handset business. The Taiwanese company is ranked 1.6 out of a possible 5, the lowest of more than 500 listed technology companies, data compiled by Bloomberg show.

HTC is valued at $3.8 billion, down from $37 billion at the peak, after its shares tumbled to an eight-year low on Sept. 9. The company, the first maker of phones using Google Inc. software, forecast in July an eighth straight drop in quarterly sales as it struggles to compete with Apple Inc. (AAPL) and Samsung Electronics Co.

While HTC looks like it’s “going down the route” of BlackBerry and Nokia, the price-to-book ratio is “still too expensive” for a merger or acquisition, Dennis Chan, an analyst at Yuanta Securities in Taipei, said last week. “I don’t see a comeback.” Chan is among 24 analysts tracked by Bloomberg who have a sell rating on HTC, while five advise a hold and one recommends buying the shares.

HTC’s share of the global smartphone market fell to 2.8 percent in the second quarter from 5.8 percent a year earlier, Bloomberg data show. The company, which said in February 2012 it “dropped the ball” on products, enlisted actor Robert Downey Jr. in August to promote the brand. HTC isn’t looking for a buyer and has new initiatives to spur the brand’s “full resurgence,” the company said in an e-mailed statement.

BlackBerry’s buyout plan calls for a delisting of the Waterloo, Ontario-based company’s shares, down more than 90 percent from their 2008 peak. Nokia, the Espoo, Finland-based company that was once the world’s largest mobile-phone maker, agreed to sell its handset business to Microsoft Corp. in a $7.2 billion deal.

To contact the reporters on this story: Richard Frost in Hong Kong at rfrost4@bloomberg.net; Weiyi Lim in Singapore at wlim26@bloomberg.net

To contact the editor responsible for this story: Michael Patterson at mpatterson10@bloomberg.net

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