Sunday, May 01, 2005

Why Apple Should Buy Shanda

From Pacific Epoch: Why Apple Should Buy Shanda

"In July 2005, or thereabouts, China's biggest pure play online gaming company Shanda Interactive Entertainment Limited (SNDA) is set to launch a set top box onto the market in China. The box will plug into a broadband connection and a TV, allowing users to play Shanda games and access the various content Shanda has acquired with its IPO gotten gains. Rumored price: $300
Apple Computer, Inc. (AAPL) has a product on the market that could offer all the features of Shanda's STB and more. The Mac Mini retails at $499."

"Apple with its $29.68 billion market capitalization should launch a takeover bid for Shanda, which the market currently prices at $2.28 billion.Why do it? Apple is now basking in the iPod "halo effect" and was one of the best performing stocks on the Nasdaq in 2004. Shanda also booked impressive gains in 2004 after its second quarter IPO. What next? If there is one market where Apple has executed poorly it is China."

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