Apple Imagination Technologies Stock Plunges

Category: Science Written by Sean Lennox 43 0

Imagination Technologies, which supplies graphic chips used in the iPhone, saw its stocks dip on Monday after the announcement by Apple that it would no longer use the products of the British company in two years at the latest.

Imagination, of which Apple holds 8% of the capital, plunges 71% to 79 pence on the London Stock Exchange at around 7:40 GMT after touching a seven-and-a-half-year low at 76p.

By losing Apple, its first customer, Imagination could see its turnover fall by more than 50%.

The British company, which also suffers from a lower recommendation by N + 1 Singer, “buy” to “sell”, said Apple was planning to develop its own graphics chip division.

The British group believes however that the Californian giant could hardly manufacture these components alone without infringing its patents. Imagination said to have asked Apple for explanations on this point without getting an answer.

Oliver Knott, analyst at N+1 Singer, cut his recommendation on the shares to a “sell”, saying: “If the group is unsuccessful in challenging Apple’s position, we would expect the group to need to make significant operational changes to align the cost base to the new revenue profile..”

“Imagination’s financial track record has been unpredictable over the years even before this. Last year, exceptional restructuring costs pushed them deep into the red and the hope was that they were now on the road to recovery. Their problems now are a great example of the risks in having too many eggs in one basket.”


(Esha Vaish, Patrick Vignal for the French service, edited by Marc Angrand)

Values ​​cited in the article: Imagination Technologies Group plc , Apple Inc.

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