Shares of Quanta down after chairman sells part of stake


CNA

TAIPEI — Shares of Quanta Computer Inc., the world’s largest notebook computer ODM service provider, moved lower yesterday on news that Chairman Barry Lam had disposed of some of his stake in the company, dealers said.

Quanta confirmed Lam’s sale but declined to comment further.

Shares of Quanta closed down 2.16 percent at NT$72.50 off an early low of NT$69.00, with 28.54 million shares changing hands, on the Taiwan Stock Exchange, while the benchmark weighted index ended down 0.41 percent at 6,979.13 points.

The stock opened sharply lower, falling by the maximum daily decline of 7 percent after investors took cues from foreign wire service reports that said Lam was selling 13 million global depositary receipts (GDRs), an equivalent of 65 million Quanta shares. The losses, however, were spared by bargain hunting by the end of the session, the dealers said.

The heavy selling upon the market opening came as the reports said the GDRs were priced between US$11.46 and US$11.79, which represented a 4.2 percent-6.9 percent discount to Quanta’s closing price of NT$74.10 in Taipei Tuesday, they said.

Many investors conducted arbitrage by selling Quanta shares first at higher prices and buying the GDRs later at lower prices to profit from the price difference, they added.

The GDRs accounted for 1.67 percent of Quanta’s total outstanding shares and the sale is expected to raise about US$153.3 million for Lam.

Carol Hsu, a spokeswoman for Quanta, said Lam’s move to sell his stake reflected his own strategy for asset allocation.

According to Hsu, the Lam family holds a more-than 30-percent stake in Quanta. Hsu said that as the 1.67 percent stake was sold through GDR issuance, it is expected to have only limited impact on the share price on the local bourse.

Market analysts said that as Quanta has turned cautious about the outlook for the global notebook computer market for the second half of this year, it is possible that Lam might invest the funds from his sale in the growing cloud technology business under his own name.