ARM shares soar on Apple buyout rumor

“Shares of ARM Holdings rose sharply Thursday on renewed speculation that Apple would bid for the mobile phone chip designer, according to a news report,” David Goldman reports for CNNMoney. “ARM’s (ARMH) stock rose more than 9% Thursday in early trading on the Nasdaq. Overseas, the stock rose 7%, but soared as much as 30.7% on the London Stock Exchange before losing much of those gains. A Reuters report said traders were buying up the stock on market rumors of possible takeover interest from Apple.”

Goldman reports, “ARM has long been rumored to be a takeover target for Apple after ARM-designed chips landed in the iPhone and iPad. The so-called ‘A4’ chips are manufactured by Apple, but ARM helped to draw up the blueprint for the processor and collects a licensing fee for each mobile device that Apple sells.”

Goldman reports, “Given Apple’s reliance on ARM’s technology, many analysts and investors have speculated that an outright purchase of the company would make sense for Apple to ward off the risk of ARM going to a competitor. But since almost all of Apple’s competitors are reliant on ARM as well — including deep-pocketed Google — a bidding war would likely ensue should Apple make an offer.”

Full article here.

MacDailyNews Note: Google isn’t as deep-pocketed as Apple.