Sharp Stock Gets Boost after Report that Intel, Qualcomm May Invest $378M

By Ed Silverstein November 14, 2012

Sharp got a boost in market trading this week after word that Intel and Qualcomm may invest $378 million in the company, news reports said.

Sharp shares increased some 11 percent after the news broke, according to media reports. There was an earlier report that the two companies could even invest up to $500 million in Sharp, CNET said.

The report led investors to believe that an investment by one or two of the companies would improve Sharp's finances. Sharp has been burdened with debt.

In addition to the company alliances, Sharp may see some encouragement with new demand for its products in upscale laptops, Reuters said. Sharp displays are already used in iPads and iPhones, Reuters adds. In addition, Intel is apparently interested in Sharp's IGZO displays for its "Ultrabook" laptops with touchscreens.

It is possible that Sharp and Qualcomm could come up with an agreement by the end of November, while an agreement with Intel may take longer, sources told Reuters. Sharp is also having closed-door discussions with Taiwan's Hon Hai Precision Industry Co.

Even with the stock price heading up, there are more long-term challenges at the company.

"Sharp has talked about cutting debt and inventory, but they haven't made it clear how they plan to generate cash flow and strengthen their capital base," Toshiyuki Kanayama, an analyst at Monex, told Reuters.

Earlier this month, Sharp almost doubled its full-year, net loss projection to $5.6 billion. That will lead to “seriously negative operating cash flow,” the company said. "This raises serious doubts about (our ability) to continue as a going concern."

Among the solutions being used to address the shortfalls, Sharp is trying to make alliances with other companies, lower pay for some employees, selling off assets and promoting early retirements of workers.




Edited by Brooke Neuman

TechZone360 Contributor

SHARE THIS ARTICLE
Related Articles

Cortana/Siri vs. Alexa & The Road To Robotic Post Smartphone Era

By: Rob Enderle    5/3/2016

Last week Microsoft made it clear that Cortana would only work with Microsoft's browser and search products making people question its cross platform …

Read More

Looking For The Next iPod/Echo

By: Rob Enderle    4/29/2016

The Amazon Echo, not the Apple Watch, became the last iPod-like product largely because of a far more accessible price point, a more compelling name, …

Read More

Apple Needs Reset, Not Elon Musk

By: Doug Mohney    4/29/2016

Apple's 13 percent sales decline and subsequent stock price drop this week has lead to the usual crazy talk about how to "fix" the company. Vivek Wadh…

Read More

Is the Apple Bubble Finally Bursting?

By: Andrew Bindelglass    4/28/2016

Over the past 13 years, Apple has been one of the most successful companies in the world of tech, posting sales growths in 51 straight quarters. That …

Read More

Shared-Space Providers (Airbnb) Poised to Beat Ride-Sharers (Uber)

By: Steve Anderson    4/28/2016

Travel may be starting to make a bit of a comeback, as a new report suggests that shared-space providers like Airbnb and WeWork are on the rise.

Read More