HTC shares fall 6 percent as investors' worries pile up

The company's stock ended the day at 485 Taiwan dollars, pushing the shares closer to their 52-week low of NT$403.

HTC's One X.
HTC's One X. Jessica Dolcourt/CNET

The bad news just keeps coming for HTC.

The company's shares were down 6.19 percent today, closing the day on the Taiwan Stock Exchange at NT$485 ($16.45). At that level, the company's shares have slid nearly 35 percent in the last six months, and they continue to inch their way toward a 52-week low of NT$403. During that time, the company's stock hit a high of NT$1,300.

HTC's most recent troubles reflect investor concern over the company's decision yesterday to replace its chief financial officer, Winston Yung, with former Goldman Sachs partner Chia-lin-Chang. Although the company didn't provide a reason for the change, in many cases, a CFO firing tends to indicate trouble with the company's operations or financial performance.

Reuters, which was first to report on the news, indicated that the share decline might also have something to do with HTC's competitive landscape. Samsung announced yesterday that it plans to launch the new Galaxy S III on May 3, potentially worrying investors over how HTC might respond. Samsung has quickly become the top smartphone vendor in the Android ecosystem , and it has at times outpaced Apple in quarterly smartphone shipments.

HTC, meanwhile, has watched its market share drop from 8.5 percent in the fourth quarter of 2010 to 6.5 percent in the fourth quarter of 2011, according to research firm IDC. During the first quarter, HTC reported that its sales were down 35 percent year over year , and its profit had slid by 70 percent, compared to the previous quarter. For investors, declining sales and market share, as well as trouble at the executive level, usually means that it's time to sell.

That said, some analysts aren't so convinced that HTC is a losing proposition. Sanford Bernstein analyst Pierre Ferragu said earlier this month that he expects HTC to have "a significant recovery in sales" this year, increasing its market share.

"Longer term, we believe HTC is a strong No. 3 brand in smartphones," Ferragu said. "The scale of Samsung and the success of Apple continue to represent challenges to the company's business model, but we believe HTC is in a strong position to recover from its low point."

Still, investors who have watched the company's shares plummet by 60 percent in the last year might find that optimism hard to believe.

 

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