I apologize for the late posting tonight but today's rumor is posted below. This is a good time to reflect on our rumor portfolio....Currently, 13 of our 14 rumor stocks are in the green. There is definitely statistical significance with a winning percentage of 93% and currently the only laggard being ViroPharma. Okay fine, I concede the market has been strong as well so we'll see how this metric morphs over time. I would also like to thank the readers of this blog, it seems the readership is growing at a nice clip as well.
NEW RUMORS:BIOVERIS STOCK: BIOV
RUMOR: TAKEOVER TARGET
PRICE WHEN RUMOR RECORDED ON 10/10: 9.00CURRENT PRICE: 9.00
TAKEOVER PRICE: $12-14$ CHANGE SINCE REPORTED: +0.00TIMELINE: within 3 monthsPROBABILITY: 35% NOTES:
There is a some chatter that Bioveris is going to be acquired by a larger pharma company for its potentially lucrative and patented BV M-SERIES® products which provides a platform for biological measurements. Note that the volume on this stock is thin, so be careful---------------------------------------------------------------
EXISTING RUMORS:WESTERN DIGITAL STOCK: WDC
RUMOR: TAKEOVER TARGET
PRICE WHEN RUMOR RECORDED ON 10/9: 17.03CURRENT PRICE: 17.05
TAKEOVER PRICE: $20-22$ CHANGE SINCE REPORTED: +0.02TIMELINE: within 4 monthsPROBABILITY: 45% NOTES:
There is a rumor a larger player is going to acquire Western Digital. The November call to put activity is high todayGENESIS MICROCHIPSTOCK: GNSS
RUMOR: TAKEOVER TARGET
PRICE WHEN RUMOR RECORDED ON 10/5: 11.84CURRENT PRICE: 11.91
TAKEOVER PRICE: $12+$ CHANGE SINCE REPORTED: +0.07TIMELINE: within 2 monthsPROBABILITY: 55% NOTES:
There is a rumor that Texas Instruments is looking to acquire GNSSNVIDIASTOCK: NVDA
RUMOR: TAKEOVER TARGET
PRICE WHEN RUMOR RECORDED ON 10/4: 29.77CURRENT PRICE: 32.17
TAKEOVER PRICE: $35+$ CHANGE SINCE REPORTED: +2.40TIMELINE: within 1 monthsPROBABILITY: 55% NOTES:
There is a very strong rumor that INTC is in talks to acquire NVDA in the mid 30's. The stock is up almost $2 today and the call volume is very high. As of 10/5, we have reduced probability to 55% based on the fact that some investment banks are saying this deal is not going to happenTARRAGONSTOCK: TARR
RUMOR: LEVERAGED BUYOUT TARGET
PRICE WHEN RUMOR RECORDED ON 10/3: 10.03CURRENT PRICE: 10.18
TAKEOVER PRICE: $13-14$ CHANGE SINCE REPORTED: +0.15TIMELINE: within 2 monthsPROBABILITY: 45% NOTES:
There is a rumor that there is a leveraged buyout talks in progress for Tarragon and it is led by the current chairmanESPDSTOCK: ESPD
RUMOR: TAKEOVER TARGET
PRICE WHEN RUMOR RECORDED ON 10/2: 9.20CURRENT PRICE: 9.70
TAKEOVER PRICE: $12$ CHANGE SINCE REPORTED: +0.50TIMELINE: within 2 monthsPROBABILITY: 35% NOTES:
Lots of takeover rumors are swirling about ESPD and on Friday the volume picked up on the stock. There has been a lot of consolidation in this sector. We'll continue to keep an eye on this stock for more signals ZEBRA TECHNOLOGIES INCSTOCK: ZBRA
RUMOR: TAKEOVER TARGET
PRICE WHEN RUMOR RECORDED ON 9/28: 35.13CURRENT PRICE: 36.40
TAKEOVER PRICE: low to mid $40 $ CHANGE SINCE REPORTED: +1.27TIMELINE: within 2 monthsPROBABILITY: 40% NOTES:
With the consolidation in the RFID space, there is quite a bit of chatter that ZBRA is going to be acquired in the next 2 months and could already be in takeover talks (suitor still unknown). ZBRA also has an attractive patent portfolio that could be lucrative for a bigger player. Takeover value could be in low 40'sWINNEBAGOSTOCK: WGO
RUMOR: TAKEOVER TARGET
PRICE WHEN RUMOR RECORDED ON 9/27: 32.05CURRENT PRICE: 34.98
TAKEOVER PRICE: $36-40 $ CHANGE SINCE REPORTED: +2.93
TIMELINE: within 3 monthsPROBABILITY: 50% NOTES: There has been speculation that Winnebago is in takeover talked due to its option implied volatility and its option volume which has consistently 4-6 times average volume. It is possible that with the recent pullback in gas prices that a potential suitor may see this as an appropriate time to pull the trigger before valuation increasesWEBSENSESTOCK: WBSN
RUMOR: TAKEOVER TARGET BY SYMC
PRICE WHEN RUMOR RECORDED ON 9/27: 22.02CURRENT PRICE: 22.87
TAKEOVER PRICE: $26-30 $ CHANGE SINCE REPORTED: +0.85TIMELINE: within 4 monthsPROBABILITY: 40% NOTES: With the recent consolidation in the network security space, There has been some heavy speculation that WebSense will be the next to fall with SYMC as the acquirer. With a forward PE around 20 and revenue growth > 20%, Websense's key stats compare favorably with similar players who have been acquired this year. AXCELIS TECHNOLOGIESSTOCK: ACLS
RUMOR: TAKEOVER TARGET BY AMAT
PRICE WHEN RUMOR RECORDED ON 9/26: 6.90CURRENT PRICE: 7.40
TAKEOVER PRICE: $9-$9.50 $ CHANGE SINCE REPORTED: +0.50
TIMELINE: within 2 monthsPROBABILITY: 45% NOTES: Axcelis Technologies delivers vital equipment, services and process expertise to the semiconductor manufacturing industry. Strong volume on 9/22 and good follow through on 9/25. We'll be tracking this for more signalsSEPRACORSTOCK: SEPR
RUMOR: TAKEOVER TARGET BY NVS
PRICE WHEN RUMOR RECORDED ON 9/25: 46.60CURRENT PRICE: 50.90TAKEOVER PRICE: $55-$65 $ CHANGE SINCE REPORTED: +4.30TIMELINE: within 1 monthPROBABILITY: 65% NOTES: There has been quite a lot of speculation on Sepracor since Neurocrine Biosciences Indipilon didn't get FDA approval for its extended release version. Sepracor is currently trading at 22 times next year's earnings and their drug Lunesta could be lucrative to big pharma who can throw a much larger marketing budget toward the drug.
C-COR INCORPORATED
STOCK: CCBL
RUMOR: Unsolicited Bid of $12 on the table. Merril Lynch hired as an advisor
PRICE WHEN RUMOR RECORDED ON 9/25: 8.61 CURRENT PRICE: 8.98
TAKEOVER PRICE: $12 $ CHANGE SINCE REPORTED: +0.37TIMELINE: within 3 monthsPROBABILITY: 75% NOTES: CCBL has a strong portfolio of broadband and on-demand products in use by a number of telecom firms such as ComCast and Verizon. Volume has been strong in September. As of 10/3 we have upped the probability on this one to 75%. We are hearing chatter that a deal will happen within a week.
BUILDING MATERIAL HLDCSTOCK: BMHC
RUMOR: Takeover rumors in the $40 range on the table. Home Depot a potential suitor PRICE WHEN RUMOR RECORDED on 9/25: 25.99
CURRENT PRICE: 27.59
TAKEOVER PRICE: $40 $ CHANGE SINCE REPORTED: +1.60TIMELINE: within 1 monthsPROBABILITY: 40% NOTES: BMHC has been under pressure since the housing decline but has stabilized recently due to takeover rumors. Option premiums have been high for the last month with heavy call buying on 9/24
VIROPHARMA
STOCK: VPHM
RUMOR: TAKEOVER BY A LARGER PHARMA COMPANY PRICE WHEN RUMOR RECORDED on 9/25: 12.48
CURRENT PRICE: 12.03
TAKEOVER PRICE: $16-17 $ CHANGE SINCE REPORTED: -0.45TIMELINE: within 3 monthsPROBABILITY: 40% NOTES: Viropharma has had some positive press at the end of August from early trial results of its drug HCV-796 and around the time some rumors started circulating that the company would be subject to a takeover. The option calls are still very active with the Oct 12.5 call volume outnumbering the puts 15-1
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DROPPED OFF LIST (Rumors that go stale or go past the expected timeline are listed here):
NONE