After taking off for the Chinese New Year holiday, shareholders in Lenovo appear to be having some cold feet about the computer maker’s recent deal spree.
Shares in the company tumbled more than 16 percent in trading on the Hong Kong Stock Exchange on Tuesday, closing at 8.41 Hong Kong dollars, or $1.08.
Tuesday was the stock’s first full day of trading since Lenovo announced it would buy Motorola Mobility from Google for $2.9 billion last week. The deal came a week after Lenovo agreed to acquire IBM’s low-end server business for $2.3 billion.
Shareholders were also reportedly unnerved by speculation over the weekend that Lenovo was in talks to form a joint venture with Sony to buy the Japanese electronics giant’s Vaio personal computer business outside Japan.
A spokesman for Lenovo declined to comment.
The Motorola and IBM transactions are part of Lenovo’s effort to expand its dominance beyond personal computers. Under its chief executive, Yang Yuanqing, the company is focused on a so-called PC-plus strategy of expanding into mobile devices, business equipment and other areas.
But the $5.2 billion in transactions is an expensive outlay of capital. Lenovo is paying for some of the deals in stock, handing out shares to both IBM and Google. It even structured the Motorola deal so that half of the acquisition price would be paid off over time.
Several analysts downgraded Lenovo’s stock in recent research reports, worried that the work of integrating the two acquisitions - and particularly Motorola, which has lost hundreds of millions of dollars for Google - would drag down profitability in the short term.
