Passive component supplier Yageo Corp (國巨) yesterday saw its stock price tumble to a two-month low as its announcement of a share buyback plan failed to prevent investors from dumping its shares for fear of a price correction.
The company plans to buy back 4.5 million shares at NT$632.8 to NT$1,616.8 per share from today to Sept. 18, and to sell the repurchased shares to its employees.
Yageo shares have been under pressure due to Internet rumors that executives have turned bearish about multilayer ceramic capacitor (MLCC) demand and were expecting a 10 percent price reduction.
“Those Internet rumors are totally groundless,” Yageo said in a statement on Tuesday. “As the MLCC market still cannot balance supply and demand, the prices continue to trend up. There is no sign that prices are peaking.”
Yageo continues to hold an optimistic view about the MLCC market and about its operations and profits, the statement said.
The company saw revenue skyrocket 74 percent to NT$19.24 billion (US$629.13 million) last quarter from NT$11.03 billion in the first quarter.
MLCCs accounted for 62 percent of Yageo’s revenue in the first quarter, company data showed.
On Tuesday, Yageo’s stock price dipped to less than its quarterly average of NT$1,045 during the middle trading session, prompting the company to announce the share buyback scheme.
However, the announcement did not soothe investors’ worries about a price decline following several quarters of price hikes.
Yageo shares sank 4.87 percent to NT$860 yesterday, retreating from a rally of 5.64 percent in the morning trading session. The closing price was the lowest since May 17, when the stock ended at NT$844.
Local rival Walsin Technology Corp (華新科技) yesterday saw its shares plunge 6.92 percent to NT$383.5, dragged down by the market’s pessimistic sentiment.