Apple (AAPL) in Talks with Israeli Flash Memory Maker Anobit, iTunes Stores Open in Latin America
Shares of Apple Inc. (AAPL: Charts, News) declined by -3.03 or -0.77 percent to close at $388.81 per share on Tuesday after Israeli newspaper Calcalist, reported that the company was in talks to acquire Israeli flash technology company Anobit. The deal, if it materializes, would have Apple Inc. acquire Anobit for $400-$500 million.
Anobit, based in Herzeliya, Israel holds 21 memory signal processing related patents and already licenses its flash memory controllers for use in Apple's iPhone, iPad and MacBook Air. The acquisition would be the largest for Apple since buying NeXT computer in 1997 for $404 million, which brought founder Steve Jobs back to Apple. In other Apple news, the company announced on Tuesday that it was opening iTunes stores for music and movies in 16 Latin American countries: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Nicaragua, Panama, Paraguay, Peru and Venezuela. Daily Chart
At 388.81 per share, Apple Inc. stock currently trades at 14 times earnings of 27.68 (TTM
), with a yearly range of 310.50 to 426.70 per share. The stock has come a long way since trading in the low 80s in January of 2009, rising 312 percent since then. Apple stock hit its all time high in October, just one month before the death of founder and CEO, Steve Jobs of pancreatic cancer. The acquisition of Anobit for half a billion dollars may have a minimal effect on the price of Apple stock, since the company reportedly has more than $80 billion in cash and near term investments. Nevertheless, acquiring Anobit could give Apple an edge by owning and controlling cutting edge technology it already uses. Anobit has developed a chip which greatly improves flash drive performance through digital signal processing or DSP. The technology is already used by Apple to increase flash memory and improve the performance of its devices. Besides its three founding partners, who founded Anobit in 2006, several venture capital funds will also cash out. The funds, which invested over $76 million in Anobit over the past four years include, American Battery Ventures, Intel INTC and Micron Technologies MU VC Funds and Israeli fund Pitango, which sold VideoSurf to Microsoft MSFT just one month ago. In addition to the possible Anobit takeover, as previously mentioned, Apple announced opening iTunes stores in 16 Latin American countries. According to Apple's website, the stores will offer a catalog of over 20 million songs including local and international music, in addition to over 1,000 moves which will be available to rent or purchase. Prices for the new Latin American iTunes stores will be similar to U.S. pricing, with songs going for $0.99 and albums for $9.99. Nevertheless, all prices will be quoted in U.S. Dollars and funding for iTunes accounts will only be initially possible through international credit cards. The ability for using local currencies for purchasing music and movies is expected within the next six months. Both news items appear to be positive for Apple Inc. Expanding iTunes to Latin America where Apple has already sold millions of products can further benefit the company, while acquiring Anobit will make the technology Apple currently uses more exclusive, giving Apple an edge over its competitors. Whether either of these news items will significantly affect the price of Apple stock has yet to be seen. Other News About AAPL Apple: Five predictions for 2012
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92 year old Japanese camera maker tries to avoid delisting of its stock on the Tokyo Stock Exchange. Copyright 2011 by InvestorGuide.com, Inc. InvestorGuide has no control over the sites we link to, is not affiliated with these sites, and cannot take responsibility for their quality or suitability. The news, analysis, commentary and profile information is not meant to be comprehensive, and the data provided is not guaranteed to be accurate. WebFinance Inc., the publisher of this newsletter, is not a registered investment advisor or a broker/dealer. This is not a stock recommendation newsletter but rather a source for investment ideas, and we encourage you to fully research any company before considering investing. The opinions expressed herein are those of the author and do not necessarily represent the views of nor are they endorsed by WebFinance Inc. No employee of WebFinance has owned or currently owns any shares in the company described above. The above is neither an offer nor solicitation to buy or sell any securities. The trading of securities may not be suitable for all potential readers of this newsletter, and the purchase of stocks mentioned in this newsletter may result in the loss of some or all of any investment made. We recommend that you consult a stockbroker or financial advisor before buying or selling securities or making investment decisions. We are not responsible for claims made by advertisers and sponsors. Anyone who makes decisions based on what they read here does so at their own risk and cannot hold WebFinance Inc. (DBA InvestorGuide.com, Inc.) or its employees responsible.
Published on Dec 14, 2011
By Jay Hawk