HTC Goes To Court to Shore Up Shares　HTC诉花旗分析师力保股价

By newsdoug on December 14, 2011

Former smartphone rising star HTC (Taipei: 2498) is looking everywhere except for the mirror in its quest to blame anyone for its sudden reversal of fortune, this time turning to the court room where it is suing Citigroup’s (NYSE: C) research unit for publishing false information about it. (English article) HTC saw its shares soar over the last few years as sales of its popular Android-based smartphones boomed, and it scored an impressive feat back in April when it passed Nokia (Helsinki: NOK1V) in terms of market cap. (previous post HTC turns to courtroom in search of blame for rapid decline ) Since then, however, its shares have lost about two-thirds of their value, and its market cap now stands at just under $14 billion, or well below Nokia’s $18.7 billion despite Nokia’s own sharp share decline in recent months. In this latest twist for HTC, a Taiwan prosecutor is saying that HTC submitted its criminal complaint back in August, and the prosecutor’s office is now processing the matter. It strikes me as a little strange that HTC is trying to lay some or all of the blame for its rapid decline on Citi, as the company has been the main architect of its tumble by twice reducing its earnings outlook recently as its smartphones struggled to compete in the increasingly competitive smartphone space with popular models from Apple (Nasdaq: AAPL), Samsung (Seoul: 005930) and others. HTC has also been hobbled by a series of lawsuits against it by Apple, which is accusing it of intellectual property theft through its use of Google’s (Nasdaq: GOOG) popular Android operating system. Those lawsuits could ultimately prove a huge setback if US courts find in Apple’s favor, which would force HTC to stop selling some or all of its Android phones in that critical market. With all those factors working against it, perhaps HTC should take a step back and realize that the blame for its rapid decline lies squarely inside its own house, rather than on outsiders like Citi. If it’s smart, it will quietly drop this lawsuit against Citi, and focus its energies on pouring more resources into R&D and sales, and perhaps even find an alternative to Android to try and regain some of its fast fading luster.

Bottom line: HTC’s recent lawsuit against Citi looks like a diversion to blame outsiders for its rapid decline, which is largely due to the company’s own missteps and stiff competition.

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