Himax Technologies (NASDAQ: HIMX) cannot seem to get any break. After flying high to the low teens, the stock fell to the $10 range after Citron Research targeted the company.
Citron posted a tweet on Dec 6 that accused the company of fraud.
Himax responded on December 8. It responded:
"The Company reaffirms its commitment to transparent and reliable shareholder communication, and its adherence to the highest standards of corporate governance. Himax cautions investors that Citron Research has never made any contacts with the Company and that the tweet did not contain any input from the Company. Himax categorically denies any and all allegations of fraud."
Using a Finbox.io model, HIMX stock is unfavorably high until revenue from 3D sensing and WLO orders are fulfilled. The company doubled down its capex to boost its supply potential. As the company hires more staff and WLO manufacturing grows, revenue, earnings, and profit margin should all improve. The stock is still vulnerable to short-sellers until Himax fulfills its targets.
The sell ratings from analysts and the short-volume are all negative distractions for Himax. Management should best spend its efforts in carrying out its business plan while occasionally responding to negative reports to minimize the drop in the share price.
Takeaway
During its second-quarter earnings call, Himax management said it planned to kick start phase 2. Chances are good that big-name manufacturers signed on with Himax. This includes Xiaomi, Oppo, and Vivo. So the big question is when the phase 2 expansion is complete. Jordan Wu may update the project close date will be in Q1 or Q2 next year. Such an announcement will bring confidence back for investors.
