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From: Paul H. Christiansen	2/28/2018 9:12:47 AM
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Lenovo’s Downward Spiral May Not Be Over Yet In four years, Lenovo Group Ltd. went from would-be Apple Inc. challenger to an also-ran in smartphones and datacenter servers. Now it’s got a comeback plan, but some investors don’t buy it. China’s erstwhile tech darling, which lost its perch atop the PC market to HP Inc. in 2017, has shed two-thirds of its value since hitting a 15-year high in 2015. At a two-year earnings multiple of about 10 times, its stock is cheapest among the world’s largest computer makers. Yet all seven analysts ranked best by Bloomberg based on one-year returns urge investors to sell. Their average target puts Lenovo 13 percent below Tuesday’s close. From money-hemorrhaging businesses to resurgent competition for its cash-cow PC division and a revolving-door executive team, the company that once aspired to Apple and Samsung’s heights seems to have lost its way. Chief Executive Officer Yang Yuanqing’s failed repeatedly to deliver on turnaround deadlines and hasn’t fully articulated a strategy to revive ailing mobile and datacenter arms -- even as local rivals gun for its bread-and-butter Chinese customer base. The company’s even resorted to selling office buildings to prop up the bottom line. It’s a far cry from the days when Lenovo was at the top of its game. Yang took the stage at an 18,000-seat Beijing arena one frigid winter’s evening in 2014 to surprise euphoric employees with news Lenovo had agreed to take over International Business Machine Corp.’s commodity server business for more than $2 billion. That same year, it sealed a deal to buy Motorola Mobility from Google, becoming the world’s No. 3 smartphone label. That was then. The Moto line has tumbled out of the top ranks, unable to expand its footprint in the U.S. and pummeled by fast-moving rivals in Asia from Oppo to Xiaomi Corp. Liu Chuanzhi, an industry trailblazer who transformed Lenovo into one of China’s most recognizable brands, fell on his sword during this year’s address. “How many mistakes have we made? How many mistakes have I myself made?” Liu saidin February. “Without question, today’s Lenovo Group faces severe and acute challenges. The challenge is multi-dimensional and uncertain. It’s an age when innovations in technology and business model are powerful enough to overturn an industry and even social customs.” *Read More* – Bloomberg Technology

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