Quanta Storage shares plunge after large damages ordered by court

Taipei-The shares of Quanta Storage Inc. plunged by 10 percent Monday after the company was ordered by a Texas court to pay US$439 million in damages to HP Inc. for alleged price fixing, dealers said.

Quanta Storage, an optical drive storage specialist and subsidiary of Taiwan-based contract notebook computer maker Quanta Computer, came under heavy pressure as soon as the market opened, falling 10 percent, the maximum allowed in a single day, on the over-the-counter market, dealers said.

That

weakness remained to the end of the session without any sign that selling interest was fading because of the huge potential liability, dealers said.

The OTC index ended down 1.13 percent at 147.25.

Shares of parent Quanta Computer tumbled 1.87 percent to close at NT$63.00 on Taiwan's main stock exchange.

On Friday, U.S. District Judge David Hittner tripled damages awarded to HP by a jury in October 2019 to be paid by Quanta Storage to US$439 million based on U.S. antitrust law.

According to a Bloomberg report, Quanta Storage argued that tripling damages would violate constitutional prohibitions on excessive punitive damages, but the judge ruled that antitrust law allowed for the tripling of awards as compensatory rather than punitive damages.

HP sued Quanta and several other tech companies in 2013 for allegedly engaging in a price fixing scheme from 2004 to 2010 by rigging bids for HP's request for optical disc drives.

Other companies in the group cited in the conspiracy, such as Hitachi-LG, Sony and Panasonic, settled with HP, but Quanta Storage decided to continue the lawsuit.

In a statement, Quanta Storage said it served only as a storage contractor for Sony and Philips, which sold the products directly to HP, and therefore the company was not part of the alleged conspiracy.

"Quanta Storage was not capable of manipulating product prices," the company said. "HP's lawsuit has no merit at all."

In addition, Quanta Storage said HP asked it to pay a larger settlement than it asked of other accused companies, and it therefore decided to go to trial.

Quanta Storage said it will appeal the ruling and did not rule out the possibility of taking the case all the way to the Supreme Court.

Source: Focus Taiwan News Channel