I see no acquisition in the future
posted on
Nov 02, 2010 12:06PM
I have difficulty formulating any logical explanation why any company would want to acquire edigital.
Those who are presumed infringing our flash type patents may eventually end up with a settlement agreement which is not 100% sure thing.
Others who may be in violation of specific patent methodology, such as a chip manufacture, could simply enter into a license agreement.
Most if not all of the acquisitions within our industry involve a high level of product which would compliment existing product lines or bring about synergistic areas within the business including economies of scale or product enhancement utilizing engineering expertise.
Economic value and investment return would be major criteria in any potential acquisition of edigital. I have in previous posts evaluated and submitted for consideration that an amount greater than a $3.00-$4.00 range would be hard to justify.
It’s difficult to calculate more than a 4.00 cash value per share, even considering a cash account of 600 million dollars, and coupled with no debt, but limited product sales in determining value.
Perhaps you can speculate on why edigital would be a good candidate and why outside of a settlement or license agreement this would be advantageous from a product and/or economic perspective.
How about an opinion of what the acquisition value could be based on the latest statements concerning new patents, new product possibilities and how one would make an adequate return on the investment.
There needs to be a valid reason and adequate investment return for an acquisition to occur.
The next best scenario would be a merger, but again the share calculation would be based on the economic value of each entity involved and most likely would yield the same results as above, but in shares rather than cash to the shareholders.