Toshiba Shares Surge on Talk of HD DVD Surrender

Investors in Tokyo welcomed news reports that Toshiba is considering pulling the plug on its HD DVD format by pushing the company's shares up 5 percent in Monday trading.

At the market close Toshiba shares were trading at ¥829 (US$7.69), up ¥45 on Friday's close. The overall market, as measured by the Nikkei 225 index, was only slightly higher on the day.

Toshiba has been ploughing money into promoting the format for the last two years to battle stiff competition from Blu-ray Disc, a rival format backed by Sony. To promote sales Toshiba has also been deeply discounting players but the last few weeks have seen HD DVD's chances of victory substantially reduced.

In January Warner Bros. said it would drop HD DVD later in the year leaving the format with only Paramount and Universal among major studios. Then last week Netflix, Best Buy and Wal-Mart all said they would soon stop selling HD DVD discs.

Japanese television reported that Toshiba has stopped production at its factory in Japan and is currently considering HD DVD's future.

Sony shares closed up 1 percent at ¥4,900.