ANALYSIS-TomTom shares sink but pain may not be over yet

By Niclas Mika

AMSTERDAM, July 3 (Reuters) - Navigation device maker TomTom NV (TOM2.AS) has seen close to 6 billions euros ($9.5 billion) of its market value evaporate in months and its shares are at all-time lows, but anyone buying now may yet need strong nerves.

Debt from its 2.9 billion euro ($4.6 billion) takeover of map maker Tele Atlas TA.AS -- a purchase price roughly 1 billion euros higher than TomTom's current market value -- is just one concern on the minds of investors.

The European market leader pioneered portable car navigation devices wich sit above the dashboard -- one of the fastest-growing consumer electronics categories, but also one that has not been tested yet in an economic downturn.

Whether consumers squeezed by rising inflation, in particularly sharply higher petrol prices, will keep buying navigation devices is an open question, and it is also unclear if such devices will become as ubiquitous as mobile phones.

TomTom shares have been on an extended losing streak -- they have fallen on 11 of the last 12 trading days and at around 15.08 euros on Thursday are down about 78 percent from an October peak of 68.15 euros.

ING analyst Marcel Achterberg said a short-term trading factor had been hedge funds being forced to liquidate positions in TomTom and stop-loss orders being triggered in the wake.

Yet analysts are wary of recommending investors to get back into TomTom, whose main competitor is U.S. market leader Garmin Ltd (GRMN.O).