Imagination Technologies – One to watch

Prior to yesterday’s ‘up for sale’ announcement, Imagination Technologies was seeing a great deal of shorters interest via various hedge fund / basement style offices.

As seen below, (2 to 3 days old) positions were being added in the 100p to 110p range.

I doubt very much these ‘shorters’ were banking on IMG putting up the forsale sign and should apple or a large player step forward and swoop the entire business, my guess is that these shorters will be fried.

IMG is not a stock that has a huge amount of float. Apple own a large stake as do many II’s. Getting hold of stock is not easy when dealing in large orders.

Hence, it will be interesting to see the below shorts wind down or wind up as they seek to manage their exposure.

Arm Holdings went for £24bln and was seen very much the daddy of the chip world. Whilst IMG is some distance from ARM’s chip domination, the company does have IP which many Apple competitors would love to get their hands on.

Apple may just decide that taking IMG out and off the market is the best way to secure their product advantages/IP. May the game commence…

Based on previous valuations of the IMG business, an approach close to 250p to 300p might be acceptable. That’s double the current sp and potentially double or triple trouble ahead for the casino style shorters.

Not without risk of course, but with a short squeeze likely, I suspect this one will continue to soar higher. The question everyone should be asking is just how much does Apple really care about their IMG’s IP which their business has used for years?

Is a bidding war  inevitable or does Apple say enough is enough and nips this in a bud with an offer that cannot be trumped?

Current IMG share price 146.5p

0.5% short positions or above… (3 days old)

Algert Global LLC 0.71% ↑ 0.08% 2017-04-28
Caxton International Limited 0.53% ↓ -0.17% 2017-05-05
GSA Capital Partners LLP 1.58% ↓ -0.03% 2017-06-20
Garelick Capital Partners, LP 1.62% 2017-04-11
Marshall Wace LLP 0.74% ↑ 0.12% 2017-06-16
Numeric Investors LLC 0.74% ↑ 0.24% 2017-06-20

One thought on “Imagination Technologies – One to watch”

  1. I do hope readers of thesharehub took on board the heads up given back in June.

    Ironically since then, many of the shorters have actually increased their positions which is going to make the losses feel that much more painful.

    Numeric in particular have taken a serious hit on this misjudged punt.
    Considering there is a very good chance in the future that a special ‘dividend’ could be given post sale or prior to sale due to the Apple litigation case that is ongoing, shorters would also have to pay that. New short positions should be known in next day or two so it will be interesting to see who’s taken the hit and who’s hanging in there for a rainy day?

    HUB

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