Why Himax Technologies, Inc. Shares Tumbled Today
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Himax Technologies fell nearly 14% Tuesday following unconfirmed reports that Google may no longer be planning to use Himax's display chips in the upcoming wearable Google Glass product.
So what: Himax shares were still reeling from weaker-than-expected quarterly guidance earlier this month, but I previously noted shares looked attractive given Himax CEO Jordan Wu's insistence the guidance miss was only a temporary lull from a certain customer's inventory position. And remember, Himax's opportunity in wearables like Glass stood a big driver behind significant positive analyst notes earlier this year.
Now what: Keeping in mind this news is currently just speculation, such a development would be particularly surprising since Google took a 6.3% stake in Himax last July. The deal also called for Himax to prioritize its display-related investments, and provided an option for Big G to increase its stake in Himax to up to 14.8% any time over the subsequent year through preferred share purchases.
In any case, I'm not holding my breath for Google and Himax to part ways just yet. But until we hear otherwise, Himax shares will likely remain under pressure.
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The article Why Himax Technologies, Inc. Shares Tumbled Today originally appeared on Fool.com.Steve Symington owns shares of Apple. The Motley Fool recommends and owns shares of Apple and Google (A and C shares). Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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