The share price of Acer Inc (宏碁) rose by an anemic 0.48 percent as the PC maker’s newly unveiled plan to acquire privately held cloud-computing company iGware Inc for US$320 million was given a thumbs down by investors, who worried that the expensive deal would not immediately help the company.
Shares in the world’s No. 4 PC maker increased NT$0.2 to NT$41.55, while the share price of the world’s No. 5 PC company, Asustek Computer Inc (華碩), advanced 1.02 percent to NT$296. The benchmark TAIEX went up 0.55 percent.
The “transaction appears expensive given iGware’s small scale,” Morgan Stanley said in a report yesterday.
Morgan Stanley said it expected “no material profit contribution in the near term. We think it will also be a challenge for Acer, a hardware--centric company, to lead and utilize a software company.”
Robert Cheng (鄭勝榮), who tracks the notebook computer industry for Bank of America Merrill Lynch, said in a report on Thursday that “Acer should stabilize its PC business first.”
That was despite the fact that the purchase of iGware would help Acer develop its cloud--computing services, which was good from a long-term point of view, Cheng said.
The acquisition of iGware “cannot generate sales or profit contribution in the coming two quarters at least and Acer’s cloud product might be launched in 2012. [The deal] cannot help Acer overcome its current difficulties,” he said.
On Thursday, Acer chairman J. T. Wang (王振堂) told reporters at a press conference that the acquisition of iGware would have a medium to long-term impact on the company.
“The deal will be crucial for Acer to boost its brand value in the next five to 10 years,” Wang said.
Acer is scheduled to unveil its first cloud-computing services, dubbed Acer Cloud, some time next year, enabling users of its hand-held devices to share data and synchronize files, among other things, Wang said.
However, Arthur Hsieh (謝宗文), an analyst with UBS Securities Pte Ltd in Taipei, said he was not sure whether iGware’s previous work for Japan’s Nintendo Inc could be considered successful given that it could not defend against the competition from Microsoft’s game console Xbox 360 with Kinect.
“A cloud [platform] without an attractive service is unlikely to add value to a brand and therefore it will not be a true differentiator,” Hsieh said yesterday.
UBS retained a sell rating on Acer and trimmed its 12-month target price on the stock to NT$38 from NT$40 previously.
Acer is expected to swing into the red in the second quarter because of US$150 million in inventory write offs and lower PC shipments as tablet devices cannibalize notebook computer sales, analysts said.
Acer would lose NT$4.85 billion (US$168 million) in the quarter from April to last month, while revenue would decline by 15 percent quarter-on-quarter to NT$108.76 billion due to weak demand in Europe, Morgan Stanley said.
Revenues from the European market account for 40 percent of Acer’s overall revenues, according to the PC maker.
United Microelectronics Corp (UMC, 聯電) expects its addressable market to grow by a low single-digit percentage this year, lower than the overall foundry industry’s 15 percent expansion and the global semiconductor industry’s 10 percent growth, the contract chipmaker said yesterday after reporting the worst profit in four-and-a-half years in the fourth quarter of last year. Growth would be fueled by demand for artificial intelligence (AI) servers, a moderate recovery in consumer electronics and an increase in semiconductor content, UMC said. “UMC’s goal is to outgrow our addressable market while maintaining our structural profitability,” UMC copresident Jason Wang (王石) told an online earnings
Gudeng Precision Industrial Co (家登精密), the sole extreme ultraviolet (EUV) pod supplier to Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), is aiming to expand revenue to NT$10 billion (US$304.8 million) this year, as it expects the artificial intelligence (AI) boom to drive demand for wafer delivery pods and pods used in advanced packaging technology. That suggests the firm’s revenue could grow as much as 53 percent this year, after it posted a 28.91 percent increase to NT$6.55 billion last year, exceeding its 20 percent growth target. “We usually set an aggressive target internally to drive further growth. This year, our target is to
The TAIEX ended the Year of the Dragon yesterday up about 30 percent, led by contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電). The benchmark index closed up 225.40 points, or 0.97 percent, at 23,525.41 on the last trading session of the Year of the Dragon before the Lunar New Year holiday ushers in the Year of the Snake. During the Year of the Dragon, the TAIEX rose 5,429.34 points, the highest ever, while the 30 percent increase in the year was the second-highest behind only a 30.84 percent gain in the Year of the Rat from Jan. 25, 2020, to Feb.
Cryptocurrencies gave a lukewarm reception to US President Donald Trump’s first policy moves on digital assets, notching small gains after he commissioned a report on regulation and a crypto reserve. Bitcoin has been broadly steady since Trump took office on Monday and was trading at about US$105,000 yesterday as some of the euphoria around a hoped-for revolution in cryptocurrency regulation ebbed. Smaller cryptocurrency ether has likewise had a fairly steady week, although was up 5 percent in the Asia day to US$3,420. Bitcoin had been one of the most spectacular “Trump trades” in financial markets, gaining 50 percent to break above US$100,000 and
RSS