Google & Himax

Last updated on Fri 03/03/2023 - 10:24

 

By now everyone has heard that Google is using Himax Displays in Google Glass .   I'm sure everyone has also heard the rumors that Google is looking for a replacement for Himax Displays .    

 

How committed is Google to Himax ?

 

Google took a 6.3 % stake in Himax Display (HDI) with an option for  8.5 % which would give them a total 14.8 % stake if exercised .

 

Please note that Himax Display is a subsidiary of the parent company Himax .   This point is lost not only on retail investors but supposedly professionals who continue to report that Google owns 6.3 % of Himax .     I'm sure this confusion aided in the Himax run to $16 .

 

So buried in the Himax 20-F filed 4/15/2014 page F-61 we find exactly what the 6.3% stake is worth 

 

 Note 23.Redeemable Noncontrolling Interest During 2013, Himax Display, Inc., a consolidated subsidiary of the Company, issued redeemable convertible preferred shares to a non-controlling shareholder. The noncontrolling shareholder may, solely at its option, convert their preferred shares at any time into ordinary shares of Himax Display, Inc. on a one to one basis. Additionally, Himax Display, Inc. provided the noncontrolling shareholder with a liquidation preference and redemption feature and also issued the noncontrolling shareholder a warrant to purchase additional preferred shares of Himax Display, Inc, within one year from the original investment closing date. The Company recognized an initial liability at fair value for the warrant obligation at the date of issuance and changes in the fair value of the warrant are recognized in earnings. See Note 19 for further explanation. Consequently, the convertible preferred shares of Himax Display, Inc. are presented as redeemable noncontrolling interest on the Company’s consolidated balance sheet. The redeemable noncontrolling interest was originally recognized on the balance sheet at fair value. Each reporting period, the redeemable noncontrolling interest is presented at the greater of its carrying amount or redemption value. Changes in value from period to period are charged to Himax stockholders on our consolidated balance sheets.  As of December 31, 2013, the aggregate value of the redeemable noncontrolling interest was $3,656 thousand. Net loss attributable to the redeemable noncontrolling interest is $125 thousand for the year ended December 31, 2013.    

That's right,  Google's 6.3 % current investment in HDI is a whopping  $3,656,000 .   Pocket change for them 

 

This indicates to me that the Google committment to Himax is not all that is has been made out to be .