HTC: Expect US$40 Million Investment Loss on Its Stake in US-Based On-Demand Games Firm
08/19/2012| 09:38pm US/Eastern
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By Aries Poon
TAIPEI--HTC Corp. (>> HTC Corp) said Monday it expects to book an investment loss of US$40 million on its stake in U.S.-based on-demand games company Onlive Inc., which is running out of cash.
HTC said in a statement Onlive didn't manage to raise new funds to meet its operational needs and has applied for asset restructuring over the weekend.
The statement didn't elaborate.
The investment loss equals the amount HTC paid for its stake in Onlive back in February 2011. HTC hasn't disclosed its stake size in Onlive.
Analysts have been questioning HTC's more than US$700 million acquisition streak in 2010 and 2011.
In July, HTC sold back half of the 50.1% stake it bought earlier in headphone maker Beats Electronics LLC at a loss of NT$146 million ($4.8 million), less than a year after making the investment.
Back in 2011, HTC spent US$300 million to acquire S3 Graphics Inc. with the intention of leveraging on the patents holdings of the California firm in the Taiwanese firm's legal battle against Apple Inc. (>> Apple Inc.). But the patents of S3, which itself was also facing up and lost against Apple in a number of suits, haven't helped HTC much thus far.
-Write to Aries Poon at aries.poon@dowjones.com
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