Finance- Acer Essay

721 Words Mar 10th, 2012 3 Pages
Acer buys iGware for $320 million

Taiwan's Acer Inc will buy U.S.-based cloud computing firm iGware Inc for $320 million, the fifth-largest ever Taiwanese buyout of a U.S. company, as it seeks to move beyond its core hardware manufacturing business . (Reuters , July 21) The aforementioned deal worth $395 million will make it the second largest Taiwanese purchase of an American company. The the only other Taiwanese deal to surpass this was Acer's purchase of U.S. PC maker Gateway Inc for $761.5 million in 2007. Acers move gives it membership in an elite yet growing club of tech companies (Apple, Hewlett-Packard and Microsoft) that offer cloud services to its consumer base. From a tactical stand point there are numerous
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The company has also been refocusing its research and development into mobile devices to be able to compete and drive future growth. On the month of July, 2011 Acers purchase was announced. This announcement did not do anything to increase the stock price as it continued to fall and Acer continued to post losses in income. In the July to September period, Acer posted a net loss of $36.37 million, worse than a consensus forecast of an $27 million loss from 12 analysts polled by Thomson Reuters I/B/E/S. The figure compared with a net loss of $226 million in the second quarter. In the third quarter a year earlier, net profit was $142 million.

Snapshot of ACER INC (2353)
OPEN
35.30 PREVIOUS CLOSE
35.40
DAY HIGH
35.60 DAY LOW
34.40
52 WEEK HIGH
12/9/10 - 99.40 52 WEEK LOW
08/26/11 - 27.30
MARKET CAP
93.7B AVERAGE VOLUME 10 D
21.0M
EPS TTM
5.71 SHARES OUTSTANDING
2.7B
EX-DATE
07/6/11 P/E TTM
6.1x
DIVIDEND
3.65 DIVIDEND YIELD
10.31%
K = Thousands M = Millions B = Billions

Analysts appeared split on Acer’s acquisition of iGware. Some liked the idea, but others said the vendor should spend more time focusing on its core PC business. "Acer doesn't need to have its own cloud computing business," Vincent Chen, an analyst at Yuanta, told the wall Street Journal "It can lease data storage from other telecom companies. … It seems to me Acer is getting overly

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