Shares of Cayenne Entertainment Technology Co (紅心辣椒) yesterday plummeted 6.88 percent to NT$37.20, amid investor concern that the Taiwanese video game company would not be able to collect a US$3 million debt from a shuttered South Korean game developer.
Cayenne in 2013 purchased US$3 million in convertible bonds of MAIET Entertainment Inc, with plans to convert the bonds into a 20 to 30 percent shareholding in the South Korean firm this year.
However, MAIET’s game development and operations failed to keep up with the fast changes in the mobile gaming market, and the firm suffered huge losses, which in turn caused Cayenne to post non-operating losses, the Taiwanese company said in a statement.
The South Korean firm sold all of its game rights to another South Korean game developer, Masangsoft Inc, and shut down operations this year.
In a filing to the Taiwan Stock Exchange on Friday, Cayenne said its board of directors has approved a motion to entrust a South Korean law firm to pursue the US$3 million.
Cayenne’s share price plunged by the 10 percent daily limit to NT$36.30 on opening yesterday morning, before recovering some ground at the close.
Following the sharp decline, Cayenne issued a statement saying that it had recognized the investment losses in the second, third and fourth quarters of last year.
“The investment in MAIET will not affect Cayenne’s operations or profitability this year as the company had recognized all of the losses last year,” the company said.
Cayenne said that if it is able to collect the debt from the South Korean company, it would recognize the payment as non-operating gains.
Despite the investment losses caused by the shuttering of MAIET, Cayenne said it would continue looking for potential investments in video games overseas.
Cayenne said it plans to introduce more international games in Taiwan as well as upgrade its existing games to secure its position in the nation’s gaming market.
Cayenne reported a net loss of NT$238.25 million (US$7.22 million), or a loss per share of NT$8.61, in the first three quarters of this year.
That compares with a net income of NT$37.34 million, or earnings per share of NT$1.44, over the same period last year.
The company’s revenues totaled NT$430.19 million in the first 11 months of this year, dropping 45.14 percent from NT$784.11 million in the same period last year.
Japanese technology giant Softbank Group Corp said Tuesday it has sold its stake in Nvidia Corp, raising US$5.8 billion to pour into other investments. It also reported its profit nearly tripled in the first half of this fiscal year from a year earlier. Tokyo-based Softbank said it sold the stake in Silicon Vally-based Nvidia last month, a move that reflects its shift in focus to OpenAI, owner of the artificial intelligence (AI) chatbot ChatGPT. Softbank reported its profit in the April-to-September period soared to about 2.5 trillion yen (about US$13 billion). Its sales for the six month period rose 7.7 percent year-on-year
CRESTING WAVE: Companies are still buying in, but the shivers in the market could be the first signs that the AI wave has peaked and the collapse is upon the world Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported a new monthly record of NT$367.47 billion (US$11.85 billion) in consolidated sales for last month thanks to global demand for artificial intelligence (AI) applications. Last month’s figure represented 16.9 percent annual growth, the slowest pace since February last year. On a monthly basis, sales rose 11 percent. Cumulative sales in the first 10 months of the year grew 33.8 percent year-on-year to NT$3.13 trillion, a record for the same period in the company’s history. However, the slowing growth in monthly sales last month highlights uncertainty over the sustainability of the AI boom even as
AI BOOST: Next year, the cloud and networking product business is expected to remain a key revenue pillar for the company, Hon Hai chairman Young Liu said Manufacturing giant Hon Hai Precision Industry Co (鴻海精密) yesterday posted its best third-quarter profit in the company’s history, backed by strong demand for artificial intelligence (AI) servers. Net profit expanded 17 percent annually to NT$57.67 billion (US$1.86 billion) from NT$44.36 billion, the company said. On a quarterly basis, net profit soared 30 percent from NT$44.36 billion, it said. Hon Hai, which is Apple Inc’s primary iPhone assembler and makes servers powered by Nvidia Corp’s AI accelerators, said earnings per share expanded to NT$4.15 from NT$3.55 a year earlier and NT$3.19 in the second quarter. Gross margin improved to 6.35 percent,
BUST FEARS: While a KMT legislator asked if an AI bubble could affect Taiwan, the DGBAS minister said the sector appears on track to continue growing The local property market has cooled down moderately following a series of credit control measures designed to contain speculation, the central bank said yesterday, while remaining tight-lipped about potential rule relaxations. Lawmakers in a meeting of the legislature’s Finance Committee voiced concerns to central bank officials that the credit control measures have adversely affected the government’s tax income and small and medium-sized property developers, with limited positive effects. Housing prices have been climbing since 2016, even when the central bank imposed its first set of control measures in 2020, Chinese Nationalist Party (KMT) Legislator Lo Ting-wei (羅廷瑋) said. “Since the second half of
RSS