Did Apple Secretly Acquire Placebase?
There is a lot of evidence that Apple acquired mapping company Placebase this summer and that the action might have undermined its relationship with Google, for which mapping technology is a core business. But forget the sturm und drang of outrageous corporate soap opera for a moment, because there's a bigger issue. How does a registered public company in the U.S. acquire another company without giving any sort of public notice at all? And how long is Apple going to consider itself above the rules before a heavy-handed regulatory agency slaps it down so hard that the collective set of eyes in Cupertino, and among all investors, will be bouncing for months after?
Reached for comment, Apple (AAPL) declined to offer oneâ€"or to confirm that the acquisition has even taken place. But assuming there has been an acquisitionâ€"I know the evidence we're dealing with here is circumstantial, at bestâ€"this might explain the increasingly strained relationship between Apple and Google (GOOG), the Apple board's Schmidt-ectomy and the Google Voice for iPhone debacle in which the companies offered two very different stories to explain the application's rejection/delay. If Apple has acquired Placebase, it could certainly use the company's technology to replace Google Maps with an in-house mapping solution.There are a whole bunch of SEC rules that govern how publicly-held companies must operate, but they really come down to a few principles, like thou shalt be honest and let people know when something material to the business is happening. That's because the minute you let companies issue stock and then hide activities, you're opening the door to defrauding creating confusion among investors who, after all, depend on the company delivering enough information to make an intelligent decision. This is why companies have to disclose things in 10-Ks and 10-Qs and 8-Ks.
One of those little things generally considered to be material to the business is an acquisition. I spoke with Jeff Dalebroux of the national law firm Dykema who said that a public company could view an acquisition as so small in size in comparison to it as to not need disclosure. But he also agreed that it was unusual: "Sometimes materiality -- has other aspects. I assume they've considered what they thought was appropriate. They need to look at their disclosure in a big picture context, and presumably they're doing that."
Maybe I just don't get it, but it would seem to me that viewing such an acquisition as material might be especially germane when the acquisition could be competitive with the existing entangled relationship that Apple has -- uh, had ... oh, you know what I mean -- with another, namely Google. I've checked and can't find a single SEC filing from Apple that would cover this type of activity. What amazes me here is that Apple is flat out saying that it won't comment. How do you take that other than, "Yes, we bought the company and, no, we don't think we owe any explanation to anyone."
Because it would have to be to anyone. To alert, say, large institutional investors or analysts and not issue a press release so everyone had the same information would seem to be a pretty significant breach of SEC regulations. So I have to assume that whatever is going on, Apple is simply not telling anyone. Just as it didn't tell anyone about the degree to which Steve Jobs ailed. Or who knows what else?
If any other technology company pulled even one or two of these types of maneuvers, people would be baying at the moon for a blood sacrifice. For whatever reason, Apple has in the past seemed coated with Teflon. Only, the thin protective film seems to be chipping away, as it faces various government investigations around the world.
Image via stock.xchng user Mart1n, site standard license.