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by indy 3371 days ago
Does the decrease in share price make them a more attractive acquisition target for Apple?
6 comments

A few years ago I was working for a company which provided value added mobile services to the UK market. The biggest money maker at the time was premium SMS, however we didn't have our own SMS gateway - we just resold services of another provider (which was unbeknown to clients at the time).

Shortly after I joined the bosses decided that we were giving away too much money to the provider, so began talks for an acquisition. The provider was willing, but were asking for much more than we were offering, so the talks fell apart. As such we ended up building our own SMS gateway and switched all our traffic to that - exactly replicating their API, bugs and all, in less than a year.

As we were their main customer they ended up losing 70%+ of their revenue overnight when we switched. A couple of years later we bought them, for much less than we originally offered. Both companies at the time were private companies, but I wouldn't be at all surprised if the same happens here.

As soon as I started reading this comment I was thinking "I worked at a company that did the exact same thing!" Ha ha, small world :)
Almost certainly not.

Apple just announced to the whole world that they are no longer interested in Imagnation Technologies' IP.

Announcing to the world that they were interested in Imagination Technologies after all (by acquiring them) would not only have made the prior announcement deceptive, but also (almost certainly) be considered market manipulation, given that the announcement caused a 60% drop in the stock's price.

You're likely correct overall - However worth adding in this case it was Imagination making (and phrasing) this announcement, not Apple.
Imagination had little choice if they received notice from Apple, as noted by an other commenter

> UK regulations on stock markets are quite tough, publicly listed companies must share information that could impact the company as soon as they can.

Yup. I'm making a different point.
There is a long history of customers using their leverage over a supplier to say that you either allow us to buy you, or we take our business to a competitor - or in house.
I wouldn't put this past them as an acquisition tactic, Imagination drops MIPS, Ensigma and suddenly they look very attractive just for the patents alone.
Yeah, this is an open letter informing the world that imgtec is turning from a company producing useful stuff into yet another patent troll.

Patents belong in the garbage.

What happens when you put all your eggs in one basket..
I think apple already has shares in IMG. This would be huge blow to them since they are their 1 big customer.
Bingo.

"Apple currently holds more than 8 percent of the company."

http://www.theverge.com/2017/4/3/15158982/apple-iphone-gpu-i...

It makes them a more attractive acquisition target for anyone who wants a decent IP portfolio.
Wouldn't that be considered manipulation? Or at least, using inside information.
I don't think it would be insider trading as they would not be buying or selling stocks based on non-public information.
OK, I guess. But it would have been illegal if Apple had shorted IMG before informing them about the end of licensing, right?