This article is about nuance communications.
Nuance Communications, Inc. (NASDAQ: NUAN) is a leading producer of voice and language solutions for individuals and businesses around the globe. The company’s voice recognition software, the Dragon NaturallySpeaking engine, powers several of Apple’s applications including the Mac OS X and iOS. Specifically, Apple uses Nuance’s technology for voice recognition on its iPhone.
Recently, MacRumors reported that Apple is rumored to be negotiating some sort of deal or joint venture with Nuance. The company saw its share price shoot up over 8% today on the news, closing at $21.76 on speculation regarding the possible Apple takeover. The shares also made an intra-day 52-week high of $22.93.
The question now remaining is: What is the likelihood of a direct acquisition by Apple versus a joint venture? Nuance has several patents on its technologies, which would likely drive up the price tag for the company. While Apple does have the cash on hand for a purchase (over $29 billion as of March 2011), it is not known to make purchases of this magnitude ($6 billion to $8 billion) often.
Apple may very well be more interested in a stronger or more expansive joint venture or partnership or licensing deal with Nuance. What type of share price appreciation can investors and traders expect from the announcement of a more expansive joint venture or partnership? That is the question of the day. With the stock price surging only 8% today after a general falloff this month so far, more appreciation may be in the cards for the next few trading days.