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Reports emerged over the weekend claiming Lenovo, the world's No. 1 PC maker in terms of shipments, has been in talks with Sony about a possible joint venture involving the sale of Sony's Vaio PC business. Considering that Sony's Vaio PC division is operating at a loss, not to mention Lenovo having just announced plans to purchase Motorola Mobility for $2.91 billion, investors are spooked.
As a result, Lenovo's share price dropped more than 16 percent today, Reuters reports. Lenovo has been doing well by outperforming its competitors in the PC space, though it decided to go on a spending spree in recent weeks, highlighted by the Motorola acquisition. The company also purchased IBM's low-end server unit for $2.3 billion.
The PC maker declined to comment on the Vaio rumor. Sony, on the other hand, denied the accuracy of the report, though admitted it was looking at various possibilities for its Vaio PC division.
Since announcing the IBM deal last week, Lenovo's market value is down nearly $3.8 billion. In addition, Lenovo's drop in share price today is the company's biggest one-day dip in more than 5 years.