Two warring smartphone giants, Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG), seem to have put aside their differences to make a joint bid on some of Kodak’s 1,100 imaging patents, reports Bloomberg. After both companies separately attempted to purchase Kodak’s (EKDKQ) portfolio for less money this summer, the two have jointly offered $500 million.
Is This a Value Purchase?
Bloomberg reports, “The patents for sale relate to the capture, manipulation and sharing of digital images. In court documents, Kodak has said the patents may be worth $2.21 billion to $2.57 billion, based on an estimate by patent advisory firm 284 Partners LLC. Kodak said it has generated more than $3 billion in revenue by licensing some of the digital- imaging patents to users, including Samsung Electronics Co., LG Electronics Inc., Google Inc.’s Motorola Mobility unit and Nokia Oyj.”
CHEAT SHEET Analysis: Are These Patents a Catalyst for Google and Apple’s Stock?
One of the core components of our CHEAT SHEET Investing Framework focuses on catalyst’s that will move a company’s stock. It’s important to keep in mind that Apple and Google’s offer is just that—an offer. But if the two companies were to land these patents for $500 million, when they’re lowball value is $2.21 billion, it would make for a great value.
Additionally the patents relate to the “capture, manipulation and sharing of digital images.” After apps like Facebook’s (NASDAQ:FB) Instagram were bought for $1 billion, it is a smart move for Apple and Google to invest in patents that could help them form a competitor to Instagram. The bid is smart for Google in with its recent release of Snapseed, a photo-sharing application marketed a middle ground between Instagram and Photoshop.
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