Advertisment

Acer shares down 3 pc after CEO resignation

author-image
CIOL Bureau
Updated On
New Update

TAIPEI, TAIWAN: Shares in Acer, the world's No. 2 PC vendor, tumbled 3 per cent on Friday after the surprise replacement of its chief executive raised uncertainties over potential changes in strategy.

Advertisment

By 0223 GMT, Acer had fallen 3.17 per cent, while the benchmark index traded flat. It had briefly risen as much as 1.7 per cent in early trading.

The company also said on Thursday it will buy back 54 million shares over the next two months, starting on Friday, with a price of T$55-100 per share. But that wasn't enough to prevent a fall, analysts said.

"Even with a share buyback plan, Acer does not have enough funds to counter the large sell-off," said Kenny Ko, proprietary trading vice president at Taiwan International Securities Corp.

Advertisment

"Acer has reserved T$5.4 billion for share buyback, but the turnover now is already over T$3 billion."

Others noted concern of Acer's strategy.

"The news may weigh on Acer's share price despite the share buyback as (outgoing CEO Gianfranco) Lanci has been viewed as a key man behind Acer's success, especially in Europe," said Morgan Stanley analyst Grace Chen in a research report.

"We previously read Acer's miss of fourth quarter and first quarter guidance as a temporary blip, but these developments may signal some uncertainty due to potential changes in organisation and strategy."

tech-news