Lenovo's Slump Shows Not All Asian Tech Stocks Are a One Way BetBy
Investors are giving up on Lenovo Group Ltd., the Chinese firm that muscled its way on to the global technology stage through purchases of IBM’s PC division and the Motorola smartphone business.
While online game maker Tencent Holdings Ltd. racks up the record highs, leading Hong Kong stocks to regional domination, Lenovo shares are plummeting. Unlike Tencent -- whose earnings again surprised to the top side last week -- Beijing-based Lenovo posted an unexpected quarterly loss Friday, sending the stock to a six-year low on Monday. The firm’s debt got hit as well, with the spread on 2022 notes ballooning to the widest in over a month.
The computer maker’s shares have slumped 68 percent from a high reached in 2015, a rout that puts it alongside mainland Chinese stocks that collapsed when an equity bubble burst two years ago. The disconnect between the company’s shares and the global tech stock boom just makes it all the more depressing for Lenovo investors.
— With assistance by Neha D'Silva