Stock Rumors for 12/12/06
Below is the rumor for 12/12, Happy Trading!!
NEW RUMORS:
Smith Micro
STOCK: SMSI
RUMOR: TAKEOVER TARGET
PRICE WHEN RUMOR RECORDED ON 12/12: 15.62
TAKEOVER PRICE: $22-24
TIMELINE: within 4 months
PROBABILITY: 45%
NOTES:
We have recently heard rumors that Verizon is looking to acquire Smith Micro to bolster its development capabilities and mobile product suite including SMSI's QuickLink Mobile Solutions. Note that Verizon recently inked a deal to bring YouTube videos to cellphones so this move could further bolster that strategy.
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EXISTING RUMORS:
Please look at the Portfolio Review Posts to see how the stocks below are doing
STOCK: MSTR
RUMOR: TAKEOVER TARGET
PRICE WHEN RUMOR RECORDED ON 11/21: 125.01
TAKEOVER PRICE: $155-165
TIMELINE: within 2 months
PROBABILITY: 65%
NOTES:
We have recently heard quite a bit of chatter on MSTR being approached by a private equity firm to take the company private in the $160 share range. MSTR trades at a favorable multiple compared to its peers and it is likely the CEO favors going private over continuing as a public company. MSTR does not issue guidance or hold earnings conference calls which cause many analysts to not closely follow the stock
Merge Technologies
STOCK: MRGE
RUMOR: TAKEOVER TARGET
PRICE WHEN RUMOR RECORDED ON 11/3: 7.58
TAKEOVER PRICE: $11-12
TIMELINE: within 4 months
PROBABILITY: 55%
NOTES:
Hearing chatter MRGE may be taken out by a larger healthcare information company like Emdeon or Cerner. MRGE has recently emerged from a host of SEC issues and its eFilm line is gaining traction. Its current valuation is noted to be undervalued.
Kinetic Concepts
STOCK: KCI
RUMOR: TAKEOVER TARGET
PRICE WHEN RUMOR RECORDED ON 10/26: 33.80
TAKEOVER PRICE: low 40's
TIMELINE: within 2 months
PROBABILITY: 45%
NOTES:
Hearing chatter that KCI has been approached by a private equity firm to go private. KCI had a steep drop earlier in the year due to an unfavorable decision in a patent infringement lawsuit. Some analysts believe the company believes it can compete regardless of the decision and currently has a favorable valuation
New York Bancorp
STOCK: NYB
RUMOR: TAKEOVER TARGET
PRICE WHEN RUMOR RECORDED ON 10/16: 16.74
TAKEOVER PRICE: $20-21
TIMELINE: within 3 months
PROBABILITY: 35%
NOTES:
There was chatter about 4 months ago around a NYB takeover and we are hearing similar chatter that NYB will be taken over by a larger regional bank in the last few days. We'll watch the signals on this one to see if it pans out
TIBCO
STOCK: TIBX
RUMOR: TAKEOVER TARGET
PRICE WHEN RUMOR RECORDED ON 10/12: 9.00
TAKEOVER PRICE: $12-13
TIMELINE: within 1 months
PROBABILITY: 45%
NOTES:
There is renewed chatter that Tibco could be taken over soon by a bigger player such as ORCL or IBM. In addition the Oct and Nov $10 calls were very strong today and there is talk that it has recently landed some of the high seven figure/low eight figure deals that have been discussed in the last 2 earnings conference calls. UPDATE- As of 11/20, we are continuing to hear chatter about tibx and a possible takeover by end of year
BIOVERIS
STOCK: BIOV
RUMOR: TAKEOVER TARGET
PRICE WHEN RUMOR RECORDED ON 10/10: 9.00
TAKEOVER PRICE: $12-14
TIMELINE: within 3 months
PROBABILITY: 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-SERIESĀ® products which provides a platform for biological measurements. Note that the volume on this stock is thin, so be careful
WESTERN DIGITAL
STOCK: WDC
RUMOR: TAKEOVER TARGET
PRICE WHEN RUMOR RECORDED ON 10/9: 17.03
TAKEOVER PRICE: $20-22
TIMELINE: within 4 months
PROBABILITY: 45%
NOTES:
There is a rumor a larger player is going to acquire Western Digital. The November call to put activity is high today
GENESIS MICROCHIP
STOCK: GNSS
RUMOR: TAKEOVER TARGET
PRICE WHEN RUMOR RECORDED ON 10/5: 11.84
TAKEOVER PRICE: $12+
TIMELINE: within 2 months
PROBABILITY: 55%
NOTES:
There is a rumor that Texas Instruments is looking to acquire GNSS
NVIDIA
STOCK: NVDA
RUMOR: TAKEOVER TARGET
PRICE WHEN RUMOR RECORDED ON 10/4: 29.77
TAKEOVER PRICE: $35+
TIMELINE: within 1 months
PROBABILITY: 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 happen
TARRAGON
STOCK: TARR
RUMOR: LEVERAGED BUYOUT TARGET
PRICE WHEN RUMOR RECORDED ON 10/3: 10.03
TAKEOVER PRICE: $13-14
TIMELINE: within 2 months
PROBABILITY: 45%
NOTES:
There is a rumor that there is a leveraged buyout talks in progress for Tarragon and it is led by the current chairman
ESPD
STOCK: ESPD
RUMOR: TAKEOVER TARGET
PRICE WHEN RUMOR RECORDED ON 10/2: 9.20
TAKEOVER PRICE: $12
TIMELINE: within 2 months
PROBABILITY: 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 INC
STOCK: ZBRA
RUMOR: TAKEOVER TARGET
PRICE WHEN RUMOR RECORDED ON 9/28: 35.13
TAKEOVER PRICE: low to mid $40
TIMELINE: within 2 months
PROBABILITY: 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's
WINNEBAGO
STOCK: WGO
RUMOR: TAKEOVER TARGET
PRICE WHEN RUMOR RECORDED ON 9/27: 32.05
TAKEOVER PRICE: $36-40
TIMELINE: within 3 months
PROBABILITY: 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 increases
WEBSENSE
STOCK: WBSN
RUMOR: TAKEOVER TARGET BY SYMC
PRICE WHEN RUMOR RECORDED ON 9/27: 22.02
TAKEOVER PRICE: $26-30
TIMELINE: within 4 months
PROBABILITY: 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 TECHNOLOGIES
STOCK: ACLS
RUMOR: TAKEOVER TARGET BY AMAT
PRICE WHEN RUMOR RECORDED ON 9/26: 6.90
TAKEOVER PRICE: $9-$9.50
TIMELINE: within 2 months
PROBABILITY: 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 signals
SEPRACOR
STOCK: SEPR
RUMOR: TAKEOVER TARGET BY NVS
PRICE WHEN RUMOR RECORDED ON 9/25: 46.60
TAKEOVER PRICE: $55-$65
TIMELINE: within 1 month
PROBABILITY: 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
TAKEOVER PRICE: $12
TIMELINE: within 3 months
PROBABILITY: 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 HLDC
STOCK: 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
TAKEOVER PRICE: $40
TIMELINE: within 1 months
PROBABILITY: 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
TAKEOVER PRICE: $16-17
TIMELINE: within 3 months
PROBABILITY: 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
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