Network Appliance Surges on Buyout Talk
By Bill Snyder
TheStreet.com Senior Writer
1/12/2006 2:59 PM EST
Click here for more stories by Bill Snyder
Fueled by takeover rumors, shares of Network Appliance (NTAP:Nasdaq - commentary - research - Cramer's Take) jumped Wednesday on very heavy volume -- its second straight day of gains.
The rumored buyer: IBM (IBM:NYSE - commentary - research - Cramer's Take), which began a partnership with the storage-gear maker about six months ago. One unnamed buy-side analyst whose company owns shares of NTAP said the M&A chatter is moving the stock, but the probability of an actual deal is low -- perhaps one in four. With a market cap of $12.4 billion, an acquisition of NTAP would be expensive and dilutive to IBM's stock.
In recent trading, shares of Network Appliance were up $2.98, or 9.8%, to $33.42. Well before the close of trading, more than 17.5 million shares had changed hands; on an average day volume is about 4.5 million shares.
Net App presented at an investment conference earlier this week, but analysts said the company reported nothing startling and there was no other news that explained the run-up.
The stock also was helped by talk that earlier rumors dogging the company of software bugs and supply shortages were not true, or at the very least, were not serious, analysts said.
thestreet.com |
