Motherboard maker Abit’s stock has taken a tumble after possible accounting problems caused the Taiwan Stock Exchange to institute a temporary halt to the trading of the stock recently. DigiTimes has a story on the latest developments. I’ll quote it at length, since it contains lots of good info:
Share prices of Abit opened limit-down but ended limit-up at NT$2.25 on the TAIEX (Taiwan Stock Exchange), Wednesday, after dropping for 20 consecutive sessions on concerns of alleged fraud in its transaction records.
A total of 100.8 million Abit shares, or a 12.07% stake of the company’s outstanding shares, were transacted on the TAIEX Wednesday, indicating that there were investors picking up Abit shares, with market sources pinpointing Foxconn as the prospective buyer.
Meanwhile, sources at Abit stated that the company is now in talks for possible business cooperation with a number of IT companies, including those that do not produce motherboards.
DigiTimes says that Foxconn denies buying up Abit shares, adding to the intrigue.
We tried to get a handle on this situation at CES, and it was tough. The folks from Abit told us everything was fine and that this would all blow over “in two weeks,” leaving us to puzzle over why there was such time-definite window for the issue to be resolved. Abit also mentioned to us that it had to make some special arrangements with suppliers in order to continue receiving components. Still, Abit’s reps were unequivocal in their confidence that the matter would be resolved.
Other industry insiders we spoke with at the show noted that Abit’s stock price had dropped dramatically, making the company vulnerable to a possible takeover. Abit is widely acknowledged to have excellent marketing and R&D, and some observers expressed confidence that Abit’s brand and products would survive a change of corporate ownership. One industry source painted Abit’s prospects in dire terms, giving the company three months before it was out of business.
Today’s news seems to strengthen the case for Abit facing some kind of change in ownership. The big question, from our perspective, is whether Abit’s excellent products and support will continue to flow from the reconstituted company. Right now, it’s anyone’s guess.