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HTC to take $40 million loss from OnLive investment

The smartphone maker also says that it has invested $35.4 million in enterprise services provider Magnet Systems.


The embattled HTC is facing some bad news, following OnLive's recent acquisition and restructuring.

The handset maker announced today that it'll be forced to recognized a $40 million investment loss in OnLive. HTC didn't provide details on the loss.

Reports surfaced back in February 2011 that HTC had invested $40 million into the cloud-gaming service OnLive. In that investment, HTC acquired 5.3 million OnLive shares for $7.50 per share.

Since then, however, OnLive has faced some trouble staying afloat in the cloud-gaming space, and last week, announced that its assets had been sold to an unidentified owner. The company quickly followed that up, saying that its service would "continue without interruption and all customer purchases will remain intact." However, OnLive was forced to layoff its entire staff, since the acquisition did not include employees.

It's not clear why HTC was forced to take a $40 million hit, though it's possible that if it did, in fact, invest the same amount in OnLive, it didn't see any cash back in the acquisition.

HTC offered up nearly the same sum today in an enterprise services provider. The handset maker announced that it has invested $35.4 million into Magnet Systems, earning it a 17.1 percent stake in the company. According to HTC, Magnet Systems specializes in an enterprise platform that "accelerates the development and delivery of mobile enterprise applications."

CNET has contacted HTC for comment on the OnLive loss. We will update this story when we have more information.