HTC Chairwoman Cher Wang may be considering spinning off the VR side of the business into a separate entity, causing stock prices in the Taiwanese company to rise sharply today.

HTC’s having a tumultuous time right now, with rapidly diminishing cash reserved and a mobile phone market that appears to be plateauing. The company has already stated that virtual reality may very well be the future for the company in the long term, now it looks possible that the company structure may reform to fit that vision.

HTC Chairwoman Cher Wang
HTC Chairwoman Cher Wang

A report in Taiwan’s Commercial Times cites unnamed industry sources who claim HTC Chairwoman Cher Wang is considering spinning the fledgling virtual reality arm of its business off into a standalone entity, away from its faltering mobile technology arm. The HTC Vive, built on technology developed by gaming giant Valve, is currently the only major competitor to Oculus’ Rift VR headset in the PC VR space and is due to launch in April this year.

UPDATE: A later report in the UK’s Telegraph website, carried a statement from Cher Wang, HTC’s CEO, refuting the idea of a second, VR-focused spin-off company. “Recent media reports stating that Cher Wang is planning to spin off HTC’s VR operations into an independent entity that will be wholly owned by Wang and HTC are incorrect,” an HTC spokesperson said. “HTC will continue to develop our VR business to further maximize value for shareholders.”

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HTC reported an operating loss of around $151M against revenue of $660M, almost half its results in the previous quarter of $1.3Bn.

See Also:  Hands-on: HTC Vive Pre Brings Notable Improvements to Visuals, Tracking, and Ergonomics
See Also: Hands-on: HTC Vive Pre Brings Notable Improvements to Visuals, Tracking, and Ergonomics

Stock in the Taiwanese company seemed to rise sharply in response to the suggestions HTC are considering the new VR company – soaring 5.3% to NT$76.50 (US$2.28), with 9.57 million shares changing hand, according to Focus Taiwan.

HTC recently demonstrated it’s latest iteration of the Vive at this month’s CES in Las Vegas – the Vive Pre includes a number of technical and ergonomic improvements to both headset and controllers. The firm recently announced that pre-orders for the Vive will go live on February 29th.

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  • Bryan Ischo

    Your conclusion of “The company has already stated that virtual reality may very well be the
    future for the company in the long term, now it looks possible that the
    company structure may reform to fit that vision.” does not fit the evidence here.

    If VR was the future of the company in the long term, why would they split that out into a separate company?

    And why would the stock price rise when they announced they were considering that?

    Answers: they would split it out because they think it will likely lose money and they don’t want that impacting the bottom line of HTC’s stock. And, the stock prices have risen because the market agrees.

    I am excited about VR, but I think there’s a very good chance that HTC and the market are right on this one.

    • user

      maybe to save the vr department when they have to sell the rest because of their financial situation?

    • Chris W

      That’s how stocks work with all companies. If one side of the business isn’t growing, and another side looks like it’s a growth market, companies split so that the loosing side does not drag down the stock price of a growing business (potentially). The fact that the stock popped up on the news always means that investors agree VR has more potential upside for HTC than phones. The stock popped because people are BUYING the stock before it splits. The two companies will be worth more money after the split so buying now will equal instant profit for investors after the split. And investors believe a new HTC VR company is more likely to see stock growth than the current HTC phone company.

      In other words, investors won’t value a mobile phone company that makes a VR headset as highly as they value a straight up VR company. So splitting VR out will make everyone richer. Stocks are a game of betting on future growth, and investors clearly believe VR has a major potential upside, unlike mobile phones.

  • P. Pzwski

    Reading tea leaves… Fate of VIVE is unpredictable. Oculus already ate the most important part of 2016 VR market (enthusiast), and if VIVE will cost 700+ USD there is a serious chance for… death:)

    • Jack Singularity

      My latest theory is that by hook or by crook, all the big players have staked out a different segment of the market. From cheapest to most expensive, Samsung/Oculus – GearVR, Sony – PSVR, Oculus – Rift, Valve/HTC – Vive.

      • P. Pzwski

        If that’s true I wanna see people spending 1000$ for VIVE:)

        That’s NOT gonna happen. And everybody complaining about Oculus ‘suggested’ PC hardware, forgetting that VIVE requires the same or higher specification… I’m really afraid about VIVE, not because I don’t like Oculus (actually I prefer Oc.), but because competition is good.

        • Jack Singularity

          I bet it will be between 6 hundred and 1000, but well under 1000. 800 maybe. And with people paying around that for the Rift, or for TV’s, Monitors and Computer Components, I dont think thats too crazy.

    • user

      Already ate? The most units will be sold at the end of the year with the big christmas sales pushes.