NEW YORK (TheStreet) -- Pixelworks (PXLW) is solving its Apple (AAPL) addiction by appointing an ex-iPhone exec to its board. The semiconductor company, which designs video and pixel processing chips, has placed former iPhone and iPod engineering head David Tupman on its board, according to a company announcement after the closing bell Friday.
Investors cheered the appointment Monday. Shares surged nearly 6% higher at the open and made the company one of the most discussed tickers on StockTwits.com.
$PXLW waiting for my pre-market order to fill-- Theodore Tsang (@TNTNT) Apr. 7 at 08:31 AM
Many cashtaggers bet Tupman's board spot would help Pixelworks solidify its relationship with Apple -- if not make it a takeout target. An email to Apple's press office for comment was not immediately returned.
Apple is reportedly looking into securing products needed to make its consumer electronic products and, with $159 billion in cash and equivalents, it certainly has plenty of money with which to play.
Pixelworks relies on Apple for more than 10% of its sales, according to the company's latest annual SEC filing. In its 10K filed last month, Pixelworks said that Apple's "retina" display led the push for higher resolution screens on mobile devices, thereby providing fuel for Pixelworks' products.
Sentiment on the stock is 96% bullish, according to StockTwits' analytics. That's impressive for a company that burned so many investors in the past few days. The stock had fallen more than 8% from April 1, as the broader market softened and investors fled high risk, high growth names for the relative safety of more established companies.
Of course, not all investors banked on an ex-Apple exec bringing in more business from Tim Cook and Co. Some cashtaggers highlighted an April 2 Reuters report that Apple is interested in purchasing the display chip unit of Japanese semiconductor company Renesas Electronics as evidence that the excitement over Pixelworks' board appointment was overdone.
Presumably, if Apple owned a competing display chip company it would have little need to buy chips from competitors.
However, some cashtaggers argue that Pixelworks' board appointment makes it a more attractive target for Apple than a unit of Renesas. The discussed sales price for the Renesas unit is around $482 million, according to a report in the Nikkei newspaper cited by Bloomberg. Pixelworks' market cap is $119.64 million, based on its intraday trading price of around $5.33 per share.
$PXLW Apple in "talks"with other vendors but Pxlw got a piece of Apple flesh! Lol-- richman (@applefan) Apr. 7 at 02:22 AM
At the time of publication the author held no positions in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.