Imagination Technologies Share Discussion Threads

[pottsey] 23/6/2017 16:32

“Anyone buying the business is going to have to plough even more money in to try and win back the business that has been lost.”

Not if they are buying it for the patents and technology. Samsung had to abandon their own in-house GPU and any company in the same situation could buy IMG for those assists to solve that problem. AMD or NVidia might get interested in incorporating some of the IP just like what they did when they brought out other companies. IMG Ray Tracing plus mobile IP might fit into NVidias plans for the future very well.

You might not buy the argument but there are tons of cases of companies being brought for more than they are worth due to patents and technology other company’s wanted access to.

Look at MIPS that got into a bidding war last time even though it required more money being ploughed into it. With the amount of interest in IMG there is a good chance the same could happen again.

Personally I want to see IMG go for £2 to £4 but anything over £1 will make me happy and £4+ would be a pleasant surprise.

[pottsey] 23/6/2017 16:23

mallorca 9 last I heard IMG was expected to be in profit next report and stay in profit for years. The Apple factor has already been factored in and the price of MIPS alone is worth more than 35p. The building assets which are fully owned are also worth more than 35p so that’s 60p to 100p right there without the more valuable IP being factored in.

[sheep_herder] 23/6/2017 16:20

I don't buy the argument that a takeover price would be high because they're an IP company. You still have to show you've got a valid business that makes use of that IP.

Apple have kept them afloat while management did its best job of ignoring the low end GPU lines and fluffing whatever profit they made on other business lines like MIPS and Pure. Both the MIPS and PVR businesses are now in keep alive mode with no new wins of note.

I really don't know how you sell a business, even if it has got great IP and technology, if no one wants to pay for it. Anyone buying the business is going to have to plough even more money in to try and win back the business that has been lost.

[rossy73] 23/6/2017 16:20

Plenty of strength in the price approaching the close of the week, which you don't see on many stocks.Would suggest a premium will be paid in the closing auction and a strong start to the week

[richardc77] 23/6/2017 16:05

Be interesting to read what the weekend papers speculate about the sale, seems sure to get some coverage.

[bullet ant] 23/6/2017 15:20

We should be gunning for 200p on Monday.

My selling price is 225p.

[mallorca 9] 23/6/2017 14:16

Profit, net debt, and falling revenue.
Plus the Apple factor.
Sure they have some attractive bits but as a whole, not worth more than 35p per share.

[pottsey] 23/6/2017 14:10

Well mallorca9 that’s because you are incorrectly valuing the company based on profit levels. Which could be the worst way to value an IP company. Wasn’t MIPS alone worth more than 35p a share? Anyone remember the figures, not got time to look it up.

[mallorca 9] 23/6/2017 13:53

We shall see.
I don't think there will be a buyer for the whole business at anywhere near the current M/C.

[orkney] 23/6/2017 13:47

4th july "day of the big crash". Mallorca, what if it is the complete opposite 'the day of the big rise'. Do you really want to take the risk!? You could end up losing big time, if you haven't already? The indicators point to a sale price of possibly £2+. This could be a nightmare scenario for many shorters, would you be one of them!? Can you afford such a loss!?

[mallorca 9] 23/6/2017 13:39

It is an interesting one.

[jamesrowe] 23/6/2017 13:17

I can smell burning..... :-)

[theyak] 23/6/2017 13:00

Well this is a nice bit of excitement, enjoying the humour/sarcasm of some of the very clever newer posters..............

[mallorca 9] 23/6/2017 12:53

Annual Results are out 4th July !
That could be the day of the big crash.
At the 6 monthly's the Company had made a £2m profit and had net debt of £40m.

[greygoo] 23/6/2017 11:43

A quick in and out and a nice profit! If a buyer hasn't been announced in a matter of weeks I'd go with the view of the shorter's, but until then...

[adventurous] 23/6/2017 11:10

I see the holding by Mirabaud has increased from two days ago by 147,356.

[sogoesit] 23/6/2017 11:07

Yesterday Liberum Capital said Buy - Target Price 195p.
Which is great news as my losses will be cut to 65%!

(Apologies if someone already posted this but just came up on my news).

[mallorca 9] 23/6/2017 11:05

Be careful Andrew,

my view is that this will eventually be broken up and sold for a total equating to around 35p per share. It may take a while, but adverse news may result in a massive sudden drop.

[andrewbaker] 23/6/2017 10:59

What's a business worth? In IMG's case, that depends on the buyer. So, my take is:

High price 700p in April 2012, and current price until news of for sale, 100p. Given both prices had good reasons for so being - and that doesn't say much for buyers of shares if these prices were not realistic at the times they prevailed - that is an average of 400p. Take 100p off such a crude evaluation, which gives 300p per share. That is about double what the price is now. That would be a steal for Apple, and there are others with an interest too, so a bidding war would push the price up. Imagination owns a lot of IP that is not easily replaceable elsewhere. £1,000,000,000 is around double its market cap now, and not a big amount for such a business. I expect a price somewhere between £3 and £4 a share. IMG is without doubt a buy at the current price. Disclosure: I'm already heavily holding, but may still buy more, even if it does unbalance my portfolio for a while (until a sale happens, lol). :)

[jamesrowe] 23/6/2017 10:58

According to Short Interest Tracker "Numeric Investors LLC" increased its short position by 0.24% on 20th June. :-)

[richardc77] 23/6/2017 10:45

I think it will sell for £2+, that may well seem crazy to some but that kind of valuation is not as stupid as it sounds when you consider combining the IMG IP within a company being run properly (ie not how it was run in recent yrs ;))

[twatcher] 23/6/2017 10:18

It's worth remembering a few things. Close the company tomorrow, and there will still be a signficant revenue flow for a while.

YE April 2016, Apple contributed £60M to IMG income.

YE April 2017 hasn't been reported yet, but is in the bag. But if the company was sold tomorrow and immediately wound up, there would still be £60M+ to come in from Apple over the next 12 months, likely more given how strong the £ is compared to April 2016. Add other customers, and add in MIPS which will pull in revenue for several years regardless, and I guess there is 40-50p in value, *just* from ongoing royalty return.

All you need is someone to see £1 P.S. of other value in the company, and you have todays valuation.

Speaking of MIPS, given Mobileye's reliance on it thru to 2020+, I wonder would that nudge Intel into interest ?

[richardc77] 23/6/2017 10:14

Interesting to note the Form 8.3s popping up.

[umitw] 23/6/2017 10:14

I thought analysts said that the enterprise value of IMG was 35p..!Shows how accurate they are.