Wearable display maker Vuzix said on Wednesday that Intel had decided to halt its collaboration with the company related to the development of Internet-connected headsets.
Vuzix’s shares (VUZI) slumped as much as 37.9% to $5 in after-hours trading on Wednesday.
Intel said in a letter last week that Vuzix’s technology did not fit its “strategic plans” and that it was considering alternatives for its investment in the company, according to a regulatory filing from Vuzix.
Intel (INTC) declined to comment.
Rochester, New York-based Vuzix develops computerized, Internet-connected glasses and other video eyewear aimed at consumers, businesses and entertainment.
Intel, the world’s largest chipmaker, had invested $24.8 million in the company in January last year, buying nearly 5 million of Vuzix’s shares, as it looked to venture into new markets such as smartwatches and other Internet-connected wearable devices.
Vuzix said that the Intel deal had not contributed significant revenue to the company over the last two years.
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Intel also has an agreement with Italian eyewear group Luxottica Group to develop glasses that combine the company’s fashion brands with technology that allows wearers to access information about their health or location.