Avid To Acquire Pinnacle

I can definitely see a scenario where Avid wanted to buy Pinnacle and Steinberg desperately looked for a way out, which is what they got whn Yamaha stepped in. ------------ I agree that the recent sale of Steinberg is likely related, but I can more easily see a scenario where Avid wanted Pinnacle but NOT Steinberg. Pinnacle had to dump Steinberg before Avid would do the deal. There is too much overlap in the main DAW product lines. Steinberg really doesn't have a say in this--they were wholy owned. It's the buyer who calls the shots, not a disgruntled division. It does bring in questions about Steinberg's future. If they were in fact discarded by Pinnacle and picked up by Yamaha on the cheap, maybe they were not a "strategic" acquisition that some have made it out to be. Busch.

So if this is good for AVID, why is the stock down 10% after the announcement? Do the "wall-street" folks only see as far as their nose? Or are there a bunch of friends of insiders who decided to cash out (buy on rumor, sell on news)?. The purchase price looks like a deal -- PCLE brings with it revenue of about $300 million, essentially increasing AVID revenue by 50%. AVID will still have about $300 million cash end of year, according to reports... and annual sales of the combined companies will approach $1 billion. Which is about 50% of the market cap -- I'm no analyst, so I have no idea what I'm talking about, but I can read the financials... Are the sums greater than the parts? I'm sure AVID knows what they're doing here... this is not a small transaction. I'm not going to close my position just yet.

Bottom line, it would have been advantages for Avid to have acquired both but they did not have the money to dismantle Steinberg. Avid is losing ground in the non-lin video game big-time, Digi is growing. It made sense for them to have acquired all the video customers and bring them into there fold. Suddenly there is only two real players in the vid-edit world and one just picked up a lot of users. Digi and the whole M-Audio gang have all the price-points covered. It will be fun to see what Apple does next? Bring on the quad processors!