Tech Stocks: Rollercoaster and Rumors

It's been a busy month for deals and rumors of deals. AOL buying Yahoo? Oracle buying EMC and VMware? Here's a quick guide to last week's stock chatter.

The press release about a lower-than-expected earnings estimate from Equinix earlier this month impacted a number of other technology stocks and kicked off share sell-offs and analysts dissecting "the cloud" left and right. Then Intel comes out with an $11 billion revenue quarter and Apple clears $300 and is still considered cheap.

Even Mr. Cramer thinks Tech is having a good week!

Google third quarter results

On top of good news from Apple (AAPL) and Intel (INTC), Google (GOOG) released third quarter 2010 financial results Thursday. Google reported revenues of $7.29 billion for the quarter ending September 30, 2010, an increase of 23 percent compared to the third quarter of 2009.  GAAP operating income was $2.55 billion, with net income of $2.17 billion. Cash on hand at the end of the third quarter was $33.4 billion.

M&A rumors

It used to be a close watch of who Cisco was going to buy this year, but the acquisition pipeline for other companies has been quite active this year.

On Wednesday the Wall street Journal reported on AOL exploring an offer to buy Yahoo. The article discusses market speculation about the rumored acquisition plans, backers and possible scenarios.  I think Jon Friedman's article title is perhaps my favorite of the year though - "AOL-Yahoo: like the Mets buying the Cubs."

Another rumor floating around the web Thursday was that of Oracle (ORCL) possibly acquiring EMC. A few years back, when the Microsoft/Yahoo deal saga was unfolding there was speculation over Cisco possibly acquiring EMC. EMC has a market cap of $43 billion and an 80 percent stake in the coveted VMware. If it is Cisco's Chambers vs. Oracles' Ellison, roll up your sleeves and settle in for the bidding war to unfold.

The 451 Group discusses acquisition rumors about BMC. Oracle and Cisco are again listed as potentially interested parties, but BMC could also be on the buying end of the acquisition instead of a seller.  BMC has a $7.88 billion market cap and recently hit their 52 week high.  On Tuesday last week BMC announced that they had acquired Neptuny, a European-based capacity management and IT performance optimization solution.  If BMC is to be acquired, Dell, HP and IBM have also been mentioned as possible suitors.

Seagate (STX) may be going private, Akamai (AKAM) has unusual trading activity, and AMD reported a better than expected third quarter (Oracle was rumored to buy AMD as well last week).  Overall very interesting times for the technology industry and I imagine the 2010 acquisition spree will continue at a brisk pace for the rest of the year.

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