Shares in Scottish audio technology supplier plunge
Shares in tiny Edinburgh firm Wolfson Microelectronics slumped nearly 12 per cent at close in London last night (7th June 2013), after investors were spooked by a JP Morgan report suggesting there was slowing demand for Samsung’s new flagship Galaxy S4 smartphone.
Samsung is a key customer for Wolfson, whose shares conversely surged last month when it was revealed that it had signed a new deal with the South Korean manufacturer to provide its audio technology for its latest smartphones and tablets, include the S4.
Not only was Wolfson badly hit by the JP Morgan report, but so was Samsung itself – down 6.2 per cent – and fellow UK supplier ARM.
In its report JP Morgan said it had been carrying out “supply chain checks” on Samsung and found “substantial softening in the order momentum” for the handset.
Noting that Samsung was Wolfson’s biggest customer, analysts argued that it would be unlikely for the Scottish group “to escape the impact of the order cuts.”
The analysts cut their rating on the shares to “neutral” from “overweight”, promptly sending Wolfson shares into a sharp nosedive.
ARM shares suffered less badly, closing 1.5 per cent down at 864 pence.