HTC Sells Back $150 Million of Beats Electronics Shares After a Year of Ownership - The UpStream

Just a year after HTC acquired majority stake in Beats Electronics for $300 million, the company has decided to change its mind. Beats is buying back 25 percent of the shares sold to HTC for $150 million, the same price they initially sold them for. The decision has been marked as part of a "realignment" effort for Beats, which will now "provide Beats with more flexability for global expansion." How that will occur and why they didn't understand this concept a year ago is a bit confusing to me, however even with 25% stake in the company, HTC will be the largest outside shareholder in the company.

HTC will also be able to still have exlusivity to the Beats Audio technology found in their devices. However, things won't turn out so good for them as they are planning to post a $4.8 million loss at the end of this deal. HTC has said that they are selling the shares back due to lack of consumer interest in the audio technology in their phones. Many critics have also said that even with Beats Audio in phones like the HTC Rezound, they were unable to tell a difference in audio quality. For me, using the Rezound and the HP TouchPad, I can attest that having the tech in a mobile device makes my music stand out, especially in high-end car stereo systems.

I suppose the good news out of all of this is that if HTC isn't fully bought into the deal they thought was great a year ago, they won't have to lose all of their $300 million when Beats becomes overtaken by other headphone companies like Monster and Soul by Ludacris. Both of these companies offer new, ground-breaking, affordable headphones of all shapes and styles, without compromising audio quality or over-emphasizing the bass of a song for absolutely no reason.