For years, Creative Technology’s thinly traded shares would stir during the first week of the year. That’s when the global consumer technology event CES was held at Las Vegas, and the homegrown company, usually personally led by co-founder, chairman and CEO Sim Wong Hoo, would join the fray and showcase its latest gadgets — be it a high-end speaker set, or a nifty new headphone.
Long-suffering shareholders — of whom there were quite a few — would probably watch in bemusement as other punters drove up the price and volume for those few days before trading interest (and price) died down again.
On Jan 5, just when the glitzy CES was going on at Sin City, Creative’s shares surged more than 40% intra-day before closing at $1.76, up 24.82% Unfortunately, the trigger was no longer a new flagship product launch, but the shocking announcement by the company before the market opened that Sim had passed away the day before, leaving a void of the same magnitude suffered by Apple when Steve Jobs died.
What can one make of this? Detractors would allude to how Sim, who was born in 1955, had stubbornly held on to his role and ways for the past for decades, and how he had chalked up a string of new-fangled “next big thing” that didn’t quite live up to their hype and left the company in the red for years.
Or, is the share price’s reaction the market’s farewell salute to Singapore’s original tech entrepreneur? After all, Sim was notable for being the poly graduate, initially derided, but who then through sheer gumption and some ingenuity created new classes of audio products taken for granted today. Sim and his team gave computers a “voice”, literally. Thousands of Singaporeans of a certain generation grew up with either Cubic 99 or a Cubic CT at home, getting their first taste of computers that were still a rarity in the 1980s. Thousands more enjoyed its MP3 music players later on.
Sim’s peak of success was bringing Creative to a Nasdaq listing — the first by any Singaporean company. This put Singapore on the map and the counter even hit a peak share price of US$64. How many other tech entrepreneurs could claim to have achieved this? How many could claim to have taken on Apple, the biggest tech brand of them all, and receive a US$100 million settlement for IP infringement?
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The market works in its mysterious ways and it is impossible (or probably no need) to come to a definite conclusion why Creative’s share price surged on the news of his death. Unfortunately, Sim left the company in a much more diminished state. For years, shareholders had held on because Creative’s net asset value, boosted by a huge cash hoard, was more than two times the share price. That discount no longer exists, as the company put up with years of losses even as it kept up with its R&D spending as all tech companies should.
Over the years, quite a few analysts, inspired by their own interest in the company, tried to help revive interest in the stock. Most notably, the company’s shares were heftily traded in a couple of spectacular months back in early 2018 when it shot up from just over $1 to nearly $10 when Sim launched the Super X-Fi audio technology, promising to upend personal audio standards. The hype dissipated soon enough — probably fuelled by disclosures of how one of Sim’s co-founders Ng Kai Wa took the opportunity to offload some of his shares at $9 each.
As a follow-up, Sim talked extensively about selling rights of the technology to other audio product companies. In the company’s FY2021 annual report for the year ended June 2021, Sim painted the challenges of getting such deals done amid the disruptions caused by the pandemic. Nonetheless, he alluded to how a “well-known consumer electronics maker” is in the “final phase” of inking an OEM deal involving Super X-Fi. However, there have been no updates since then.
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In the most recent FY2022 annual report, Sim reiterated how the pandemic continued to cause disruptions on these potential deals even though the company has been trying to restart talks on these fronts. Sim warned shareholders that there is “little visibility” in “re-growing” the business in the near term.
Shareholders begrudging Sim would need some reminder that he has been drawing a symbolic salary of $1 since 2008, and that he has not received compensation in the form of shares since 2019. Even as Creative became loss-making, Sim continued paying dividends for a few more years.
Sure, strictly from an investment angle, investors can do a lot better buying other stocks. The stock market does not need Creative, and given how Creative has not bothered with any fund raising or corporate action, it clearly does not need the market too. Nonetheless, Sim should be remembered as a homegrown entrepreneur whose influence went beyond the tech realm.