Creative shares spike following news of CEO Sim Wong Hoo’s death
Creative Technology's CEO Sim Wong Hoo seen with awards picked up at the 2019 Consumer Electronics Show.
SINGAPORE — The share price of Creative Technology rose by nearly 25 per cent after news that founder and chief executive officer Sim Wong Hoo had died, closing at S$1.76 on Thursday (Jan 5).
The tech stock was last at this price range in September last year.
News broke on Thursday morning that Sim had died on Wednesday at age 67. His death was described by the company's interim CEO, president of the Creative Labs Business Unit Song Siow Hui, as a "sad and sudden development".
Lead independent non-executive director Lee Kheng Nam has been appointed acting chairman while independent non-executive director Ng Kai Wa will serve as acting vice-chairman.
Mr Sim founded Creative in 1981 and had been the company's chairman and CEO since its inception.
The homegrown company designs, manufactures and distributes digital entertainment products worldwide. It is best known for its Sound Blaster sound cards.
Commenting on the stock price jump, Mr Yeap Jun Rong, market strategist at IG, said that one of the possible reasons could be that Mr Sim is the key controlling shareholder of the company, with a more than 30 per cent stake in the company.
There may be some speculation that his stake could be put up for sale, which could "lead to the realisation of the actual value for the share price".
"Another reason may be because market participants are looking towards any upcoming succession plan from the new leadership, which could include growth initiatives to support investors’ confidence," Mr Yeap said.
In 1992, Creative was listed on the American Nasdaq stock market, but it voluntarily delisted in 2007 and now trades only on the Singapore Stock Exchange (SGX). At its peak in 2000, the share traded at more than S$60 on SGX.
The tech firm's fortunes declined in the early 2000s after its MP3 player lost out to Apple's iPod, although it successfully sued the American giant for patent infringements and was awarded a US$100 million (S$134 million) settlement.
In recent years, Creative made headlines again with its new Super X-Fi technology, which is designed to recreate a multi-dimensional sound experience in headphones.
The company recorded losses of US$11 million in the 2022 financial year. CNA
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