Just last year, Taiwanese smartphone maker HTC invested $300 million into Beats Electronics, but they appear to have changed their mind on the deal. HTC sold back half its stake in Beats for $150 million, now owning 25 percent of the company.
It is reported HTC still wants to work very closely with Beats Electronics created by Dr. Dre and Jimmy Iovine, which doesn’t explain the early cut back.
HTC’s statement says the share sale “provides Beats with more flexibility for global expansion while maintaining HTC’s major stake and commercial exclusivity in mobile.”
HTC shares fell as much as 4 percent after the sale and even stated they expect to lose $4.9 million on its Beats investment, based on the headphone company’s current book value.
The only explanation with vague details from the company is HTC and Beats didn’t mesh as well as expected. It was only a month ago Beats acquired MOG for $14 million. Could Beats be heading in a new creative direction HTC isn’t down for?
Only time will tell.Category: Featured, News | Tags: Beats by Dr. Dre, HTC, Investment, investment cut