"S7 partners with NVIDIA."
Some have speculated that these sorts of announcements could be around the corner, but I don't believe that's in our cards anytime soon if we are talking specific blockbuster headlines. A heading of this nature would surely send the SP sky high, however, unless S7 decides to manufacture its own products in full, branded as their very own, and sold directly to the end user, no such "partnership" will be announced.
I'll preface this by saying should no such announcement ever be made, this doesn't suggest that S7 investors won't generate a great ROI, nor does it undermine S7 as company, nor the significance of its patents or accomplishments. I am trying really hard not to sound negative.
Furthermore, from a capital investment requirement standpoint, S7s present day approach makes sense. To launch their own brand and sell directly to end users would be vastly more expensive to say the least.
A company that manufactures products on behalf of brands but does not have its own brand that faces the end buyer is typically called a contract manufacturer or a white-label manufacturer. These companies specialize in producing goods based on the specifications provided by their clients (brands), who then sell the products under their own brand names.
Contract manufacturers often handle the entire production process, from sourcing raw materials to packaging finished products, allowing brands to focus on marketing and distribution.
The bottom line the end user (e.g.NVIDIA) are purchasing from cable manufacturers and S7 chips are in a sense a white labeled product that's part of the end solution.
S7 executives can still provide direct consultation of their product to the end user (which serves as a competive adavantage for S7), but those interactions are overseen by the primary solutions provider. It's a Volex/Nvidia partnership. There is zero obligation for Volex to publicly give credit to S7 for their solutions beyond a press release.
Therefore to the general (investing) public, Volex is the supplier and solutions provider - not S7.
Does this make S7 ripe for a buyout (of the company and or just its patent portfolio)? Yes, but the following can impact the sale price:
If a white-label manufacturer owns patents for products it manufactures for several buyers and then decides to sell the company or the patents, the new owner would generally be obligated to fulfill the existing contracts with the buyers unless there are specific provisions in the contracts or in the sale agreement that state otherwise.
When a company is sold, the new owner typically assumes all rights and obligations of the previous owner, including any existing contracts. However, the specific terms of the contracts and the sale agreement would dictate the extent of the new owner's obligations. If the contracts contain provisions allowing for assignment or transfer to a new owner, the new owner would likely be required to fulfill the contracts. If there are no such provisions, the parties involved would need to negotiate the terms of the transfer or seek legal advice to resolve any disputes.
I'd imagine S7 is obligated... but that's good thing ...or a bad thing depending on the time or day, who you're talking to and a number of countless factors beyond anyone's control.
AI
