Roku Under Selling Pressure Amid Report TCL Is Shifting Its Business

Shares of streaming video product maker Roku Inc ROKU lost more than 5 percent Tuesday.

What Happened

A major supplier of Roku-equipped televisions, China-based TCL, said over the weekend it's looking to sell its ownership stake in its consumer-facing businesses, TechNode reported. The company told TechNode it plans on focusing on semiconductors and displays with an emphasis on research and development of a next generation display technology.

TCL's management team hinted of such a move in November when it said it's looking to shrink its business units to gain a competitive advantage in its core businesses, TechNode said.

"The world panel market has experienced a sharp decrease this year," the statement read.

Why It's Important

Some investors are taking to Twitter to interpret the reports as an opportunity for Roku investors. For example, user JP tweeted the Chinese company isn't shutting down its panel division and there's no indication Roku will see any change to its supply chain.

Investors are punishing Roku's stock and appear to be taking a view that the reports from China is a concern for the company's business moving forward.

At time of publication, shares traded down about 5.6 percent at $35.18

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