Visual effects giant Digital Domain unfazed by rumours after share plunge
Visual effects giant remains unfazed after recent share price plunge
Digital Domain Holdings, which operates the world's biggest independent visual-effects company, has brushed aside rumours that led its share price to plunge in the past two trading days as expansion plans and a management buyout remain on course.
"The company today is no different than what it was two days ago," Digital Domain chairman and chief executive Daniel Seah Ang told the South China Morning Post on Thursday.
Seah said no executive director or senior management member at Digital Domain had been arrested. He said mainland businessman Che Feng, rumoured to be the major shareholder arrested this week by China's anti-graft authorities, neither had an equity stake nor management role in the company. "Mr Che is a convertible bond holder," Seah said.
He also denied that the company's expansion initiatives, including a joint venture with Canadian interactive digital media company Immersive Ventures, have run aground.
Speculation in the market, however, continued to bedevil Digital Domain as its shares took a 14.29 per cent tumble yesterday to close at HK$1.08. That followed Wednesday's 41.4 per cent fall when the volume of company shares traded reached a record-high 2.42 billion.
"Our focus is not on the stock price, but on our goal to develop Digital Domain into a technology company," Seah said.
Most of the speculation over Digital Domain has centred on the rumoured arrest of Che, a son-in-law of former People's Bank of China governor Dai Xianglong. Che is the indirect owner of Harmony Energy, which holds convertible notes issued by Digital Domain.
Seah said Digital Domain would follow the terms and conditions of those bonds, but said the maturity date was still "more than two years from now".
He assured that the company's collaboration with Immersive was on track in terms of creating virtual reality content and high-definition 360-degree digital cameras, as well as the online and application ecosystem to support those businesses.
In a report, Guosen Securities analyst Max Gan said: "We believe the market potential of virtual reality [for Digital Domain] is huge - including but not limited to education, gaming architecture and military applications."
Seah said talks on the Digital Domain management buyout announced last month continued. The firm's senior executives agreed to buy 25 per cent of the firm for HK$3.97 billion from former chairman Zhou Jian in what could potentially be the biggest management buyout in Hong Kong.