Lenovo's value plummets as NEC leaves

China-based Lenovo Group saw its shares plummet by more than 8.1 percent after Japan’s cash-strapped NEC sold all its shares.

NEC sold its entire stake in the company which was estimated to be $229.62 million.

The price fall, which took Lenovo below the value of its real worth minus the NEC shares, indicates that shareholders did not believe that the company was going to do that well in the future.

However, a Lenovo suit insisted to Reuters that the stake sale would not impact a PC and tablet business venture the two formed last January.

Roderick Lappin, vice president of Lenovo Group and executive chairman of Lenovo NEC Holdings said that NEC could sell those shares after two years anyway as per contract. Lenovo let NEC sell them 10 months early but the joint venture is still going ahead.

Lenovo is expected to host a press conference in Sao Paulo with local media reporting that the company was acquiring CCE, a Brazilian electronics manufacturer.

According to Morgan Stanley, while Lenovo is doing alright  in the rest of the world it is losing a lot of cash in Brazil, where the majority of its losses are incurred, largely due to high import taxes and poor distribution.