Around ten years ago, Applied Magnetics Corp. (APM) was a major player in the disk head business. Competition were the likes of Quantum and Seagate; primary customer was Western Digital. They were well known, had ~5,000 employees (~1,000 in Santa Barbara - R&D, and ~4,000 in manufacturing facilities in Malasia-sp). Smart company, with smart engineers and scientists. Knowing the cyclic nature of their business, when times were good they`d build up their coffers (to the tune of $40-50M) in anticipation of the inevitable next market downturn.

As is fairly common in the high tech business, some employees of APM had left the company and started their own competing company.

APM, to remain viable, was always trying to stay at the forefront of related technology. At the time, the new ``best thing`` was to incorporate Magneto Resistor tech into their heads. They pursued this with vigor, at one point even contracting with the company I worked for for consultation (sense my company had made giant strides in this area).

It was apparently a tough nut to crack....

Then, that competing company founded by former employees announced (to APM) that they had cracked the nut. APM did their DD and evaluations, then bought out the competitor to acquire the tech. They paid $40-50M (emptying their coffers) thinking that they could now capitalize.

But, subsequent to completion of the acquisition, upon further review, testing, etc., they discovered that the newly acquired tech actually didn`t work.

But wait, they were smart folks and did thorough DD! THEY KNEW WHAT THEY WERE DOING! And they paid a huge premium for the tech.

APM no longer exists (and hasn`t for some 7-8 years).

Real story.....

SGE