SINGAPORE - Creative Technology shares jumped on Thursday after the company announced that its founder Sim Wong Hoo had died.
The stock opened at $1.45, then rose about 40 per cent to hit $1.99 – its highest since August 2022 – at 1.05pm.
It closed 24.82 per cent higher at a three-month high of $1.76 as investors took their profits. Some 1.26 million units changed hands.
This comes after the home-grown business said in a bourse filing on Thursday morning that Mr Sim, one of Singapore’s most famous tech entrepreneurs, “passed away peacefully” on Wednesday, without giving further details.
He was 67.
Mr Sim founded Creative in 1981, and had led the company since its inception.
Under his leadership, Creative became famous for its Sound Blaster sound cards and digital entertainment products. It became the first Singaporean company to list shares on the Nasdaq in 1992.
Mr Jarick Seet, Maybank Securities’ vice-president of research, said Creative has been trying to look for a new product breakthrough for years but to no avail, affecting its financial performance.
Its losses in the financial year ended June 30, 2022, widened to US$11 million (S$14.8 million), compared with US$7.6 million in the previous year, on the back of lower sales amid shipping disruptions and global shortages of semiconductors.
Mr Seet told The Straits Times: “The market may see Mr Sim’s passing as a means of lifting of restrictions for Creative to venture into other fields or products, or seek a new direction.”
Acknowledging the founder’s achievements, he added: “I think Creative will likely have to seek a new CEO with a new vision, and venture into a direction that will seek value and growth for shareholders.”
Mr Sim is the key controlling shareholder of the company, with a more than 30 per cent stake.
Mr Yeap Jun Rong, market strategist at IG, told CNA that a possible reason for the stock price jump could be due to speculation that his stake could be put up for sale, which could “lead to the realisation of the actual value for the share price”.
Creative’s board has appointed lead independent non-executive director Lee Kheng Nam as the company’s acting chairman and Mr Ng Kai Wa, Creative’s co-founder who is now an independent non-executive director, as acting vice-chairman.
It also appointed Mr Song Siow Hui, president of the company’s Creative Labs business unit, as interim chief executive officer.
The Singapore company had gone to war with Apple over their companies’ portable music players. It sued the iPod maker in 2006 for patent infringements and walked away with a US$100 million settlement.
Creative had launched its Nomad MP3 player in 1999, two years before Apple unveiled the iPod. It later also rolled out other music players such as the Nomad Jukebox Zen, which doubled up as a portable storage device for other media like photos and videos.
But its products ultimately lost out as Apple’s music player gained popularity, although it made a comeback in recent years with Super X-Fi, an audio technology that allows headphone users to experience sound in expansive, three-dimensional detail.
The company said it will give more details about Mr Sim’s cessation as its chairman and chief executive in a separate announcement.