Sony Corp. (NYSE: SNE) says it is not true, but investors and traders aren’t buying the company’s denial that it is in talks either to sell its Vaio personal computer business to China’s Lenovo Group or put the business into a joint venture.

Sony has been trying to figure what to do with the Vaio PC business for some time. It is now losing money, not surprising given the decline in personal computer sales, especially in developed economies.

The story of a possible combination came Saturday when Japanese broadcaster NHK reported that talks between the companies. Sony promptly denied the report, saying it “continues to address various options for the PC business, but the press report on a possible PC business alliance between Sony and Lenovo is inaccurate.”

But the speculation clearly won’t go away. That it won’t go away strongly suggests something is going on. That is why Sony shares are higher.

Personal computer sales have been falling for a few years as Apple Inc.’s (NASDAQ: AAPL) iPad and iPhone and competing tablets and smart phones have won consumer hearts.

How much money Sony is losing on the Vaio isn’t clear, but the company has said its PC business would show a loss for the 2014 fiscal year that ends in March. The business (including Vaio laptops and desktops) sold 7.5 million units in its 2013 fiscal year, flat from a year earlier.

Lenovo is now the top global producer of PCs, according to market researcher IDC, shipping 53.8 million PCs in 2013, up 2.7% from 2012. Hewlett-Packard Co. (NYSE: HPQ) and privately held Dell Inc. were second and third. Both saw sales declines in 2013, IDC said.

Lenovo has been on an aggressive buying spree. It recently agreed to buy International Business Machines Corp.’s (NYSE: IBM) low-end server business and announced a deal last week to buy Google Inc.’s (NASDAQ: GOOG) Motorola handset business for $2.91 billion. Google had paid over $12 billion for the business just two years ago.

The buying has come so fast with such big numbers that investors probably should be looking at the company with some skepticism. Lenovo’s U.S. ADRs have fallen 19% since peaking at $27.99 on Jan. 29 and off nearly 8% for the year.

Sony shares were up 78 cents, or 5.1%, to $16.03 in New York trading on Tuesday. Sony is down 9.6% for the year, despite Tuesday’s gains. Lenovo shares fell more than 16% to $8.41 (HK) in Hong Kong trading. It was the worst one-day loss for the shares in more than five years. The U.S.-traded American depositary units were off $2.84 or 11.9%, to $22.55 in New York.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.