Further Concern for HTC as Stake in Beats Electronics is Re-sold

Over the weekend, HTC announced that its 50% share in Beats Electronics will be re-sold back to Dr. Dre’s company for $150 million. Only in August last year did HTC purchase its majority share in Beats Electronics for $309 Million, and to the surprise of many, have suddenly re-sold half of their purchase, at a loss of $4.9 million.

HTC Corporation has said that the sale ”provides Beats with more flexibility for global expansion while maintaining HTC’s major stake and commercial exclusivity in mobile”, however the true nature of the sale, for now, is unknown. Whether HTC aimed to raise revenue through their sale of beats, or they came to the realisation that such a stake provided no advantage to the company, is almost irrelevant.

The company has recently suffered huge losses, thus it seems too coincidental that HTC have suddenly sold their stake in Beats Electronics, amidst a struggle to claw their way back to the top of the market.

Further, since the sale of their portion in the audio company, HTC has suffered another share-price drop of around 4.3% amongst speculation that the company could be close to winding up.

Let me know what direction you think HTC will take in the next six months. Are they nearing a wind up? Or are they closely following some plan to get back to the top of their game?