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PORTLAND - Pixelworks, Inc. (NASDAQ:PXLW) announced Wednesday it has signed a definitive agreement to sell its Shanghai subsidiary to a special purpose entity led by VeriSilicon Microelectronics (Shanghai) Co., Ltd. The company, which currently holds more cash than debt on its balance sheet, has seen its stock surge over 111% in the past six months.
The transaction values Pixelworks Semiconductor Technology (Shanghai) Co., Ltd. at RMB 950 million (approximately $133 million), according to a company press release. After accounting for share transfers to other shareholders, transaction costs and withholding taxes, Pixelworks expects to receive between $50 million and $60 million in net proceeds. This cash injection could be crucial, as InvestingPro data shows the company has been rapidly burning through its cash reserves.
The sale requires approval from holders of 67% of Pixelworks' outstanding common stock and is expected to close by the end of 2025.
"This executed definitive agreement to sell the Company's controlling interest in our Pixelworks Shanghai subsidiary is the result of our previously communicated, extensive strategic review process," said Todd DeBonis, President and CEO of Pixelworks.
The company's board of directors unanimously approved the definitive purchase agreement. Pixelworks plans to file a proxy statement with the Securities and Exchange Commission regarding the proposed transaction.
Pixelworks provides video and display processing solutions for various screens, from cinema to smartphones. The company has been in the image processing industry for more than 20 years.
The announcement comes as part of the company's strategic review process, which was previously disclosed to investors. The information in this article is based on a press release statement from Pixelworks.
In other recent news, Pixelworks Inc. disclosed its Q2 2025 earnings, which showed a significant shortfall in expectations. The company reported an earnings per share (EPS) of -$1.00, far below the anticipated -$0.08, resulting in a substantial 1150% miss. Additionally, Pixelworks' revenue reached $8.25 million, which did not meet the forecasted $9.7 million, marking a 14.95% revenue miss. Despite these earnings results, the company announced a $7 million registered direct offering, selling 666,667 shares at $10.50 each to institutional investors.
This offering is expected to close soon, subject to customary conditions. In product news, Pixelworks' X7 Gen 2 visual processor has been integrated into the new realme P4 5G and P4 Pro 5G smartphones. The realme P4 Pro 5G supports advanced features such as a 144Hz refresh rate and high-frequency dimming, while the P4 5G model includes a 6.77-inch AMOLED display. These developments highlight Pixelworks' ongoing efforts in the tech space despite recent financial challenges.
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