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The article talks about one of the risks being a "value-destroying takeover". Is there anyone or anything out there that could even try this with Apple? Is th
by sbarre 13y ago
The article talks about one of the risks being a "value-destroying takeover".
Is there anyone or anything out there that could even try this with Apple? Is that even really a risk for them?
It would seem in their market that any competitor or threat to their business would be spotted miles and years away..
- Fomite 13y agoThey're concerned about Apple taking something over, not Apple being taken over. With a massive cash reserve, it becomes easier to buy up interesting new companies, and something like 80% of these destroy value.
- johansch 13y agoThat last bit sounds quite interesting. Is there some data on this somewhere?
- Fomite 13y agoDon't have data on hand (it's not my field, I was discussing M&A with a finance type) but this looks like a potentially interesting take: http://www2.warwick.ac.uk/fac/soc/wbs/subjects/accountinggroup/eventsandseminars/richard_taffler_paper.pdf http://www2.warwick.ac.uk/fac/soc/wbs/subjects/accountinggro...
- gress 13y agoA concern notably not grounded in any evidence about how actually Apple operates.
- nitrogen 13y agoFingerWorks and PrimeSense are both examples of Apple buying technology companies. FingerWorks stopped shipments when Apple bought them, limiting FingerWorks technology only to Apple products. We've yet to see what they do to PrimeSense.
- gress 13y agoThis precisely supports the point that Apple carefully avoids the kind of value destroying acquisitions, that shareholders might need to be concerned about. In the case of fingerworks, it would seem to have been a fantastic act of value amplification for Apple.
- smackfu 13y agoWell, you turn a company that can sell to anyone in the industry and make a profit, into one that can only sell to one customer and makes zero profit. The former is generally going to be valued higher than the latter.
- gress 13y agoThis makes no sense. The companies Apple acquires are not turned into anything. The personnel and technology are absorbed and deployed in the creation of future products, many of which are the most popular in the world. Value is magnified - not destroyed.
- smackfu 13y agoThe question is whether the total value the company adds to Apple is greater than the total value that company would have had over its lifetime if not acquired. That doesn't mean it's a bad move for Apple to make the acquisition, but it may "destroy value" in the process.
- gress 13y agoThe total lifetime value is reflected in the price established by the market at sale time. Value is not destroyed.
- nitrogen 13y agoI suppose one could consider two types of value destruction. The kind that would bother shareholders is the kind that buys a company for $1e9, then writes it off as a loss when that company turns out to be worthless. FingerWorks is not this kind. The other kind, the kind that bothers consumers, is the kind that buys a company to keep the technology away from competitors and open source projects. FingerWorks definitely fits this description. I hope the same does not hold for PrimeSense.
- sbarre 13y agoAhh.. cool, thanks for the clarification