“Just as the Apple iPhone launches in Europe, a German company that analysts believe is the major supplier of its unique touch screen is under fire for its financial practices and lagging profitability. Balda (BADG.DE), which makes touch screens in Xiamen, China, via a joint venture with Singapore-based TPK Holding, raised eyebrows on Oct. 31 when it sold $50 million in ‘convertible profit participation rights’ to unnamed institutional investors,” Jack Ewing reports for BusinessWeek.
“The 8% interest rate on the paper, which is similar to a bond that can be converted to stock, struck analysts as too expensive, and they expressed frustration with the sparse information that Balda management disclosed about the reasoning behind the issue. Analyst Tobias Loskamp of BHF-Bank in Frankfurt, who’s normally bullish on Balda, criticized management’s ‘needless lack of transparency.’ A Balda spokesman said the company, which just hired a new chief financial officer, is striving to improve disclosure,” Ewing reports.
“Neither secrecy-obsessed Apple nor Balda has ever confirmed that Balda is supplying screens for the iPhone… Balda is probably also supplying touch-screen components to the new iPod Touch, says BHF-Bank’s Loskamp, who continues to rate the shares a ‘strong buy.’ However Apple, which historically does not like to be too dependent on any one supplier, also is commissioning screens from other companies such as Japan’s Sharp, industry watchers say,” Ewing reports.
“Balda’s future hinges on continuing to remain in Apple’s good graces as bigger rivals try to duplicate or beat its technology,” Ewing reports.
More in the full article here.
[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]