Rackable Shares Jump on Deal Rumors
June 5th, 2007 By: Rich Miller
Rackable shares are up about 8 percent in pre-market trading after strong gains yesterday, apparently due to renewed takeover rumors. RACK shares started the week at about $12 a share, and surged more than $1 early Monday before closing at $12.69. This morning’s activity has ranged between $13.65 and $13.90, according to the CNBC ticker. There have been persistent rumors that Rackable may be a takeover candidate, with Dell mentioned most often as a prospective buyer. Several trading blogs mentioned leveraged buyout chatter as a driver in yesterday’s gains.
TradingMarkets.com reports this morning that Rackable is among stocks with an “abnormal” call option volume, which is qualifies as “not easily explained by arbitrage operations.” This level of activity is “suggests a possible takeover, extraordinarily good earnings report, or other news which may favorably affect the stock.”
Rackable provides servers and storage products for high-density data center deployments, and has been noted for its DC power technology, innovative back-to-back rack design, and recent unveiling of a mobile data center.