Why Himax Tech Shares Skyrocketed

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Taiwanese chip maker Himax Technologies soared a whopping 34% today after tech gorilla Google agreed to acquire a small stake in one of its units that develops tiny displays.

So what: Himax said the investment will help the production of liquid crystal on silicon chips and modules that are used inside head-mounted devices such as Google Glass. The investment by Google also validates Himax's technology in the space and confirms that it will indeed be one of Google Glass' key suppliers, forcing analysts to increase their growth estimates substantially on the Taiwanese company.

Now what: The transaction is expected to close in the third quarter of 2013 subject to regulatory approvals and other closing conditions. "We look forward to leveraging this investment and our collective expertise with Google to create unique and transformational LCOS technologies for many years ahead," said Himax President and CEO Jordan Wu. With the stock now up a staggering 350% over the past year, however, I'd wait for a lot of the exuberance to fade before buying into that bullishness.

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The article Why Himax Tech Shares Skyrocketed originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Google. The Motley Fool owns shares of Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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