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Jan.17

9:09 PM ET

Thursday, 17 Jan 2008

Icahn's Next Target?

Posted By:Tom Brennan

Topics:Carl Icahn | Mergers & Acquisitions | Technology | Stock Picks | Stock Market

Sectors:Telecommunications | Technology

Carl Icahn
Shiho Fukada / AP
Carl Icahn
Cramer seems to have knack for calling buyouts. At least that’s what Carl Icahn thinks.

The activist investor just had a huge payday after Oracle [ORCL Loading... () ] bought BEA Systems [BEAS Loading... () ]. Icahn had a 13% stake in BEAS, and on yesterday’s Stop Trading!, he tipped his hat to Cramer for turning him onto the company.

Now, the Mad Money host thinks Wind River Technology [WIND Loading... () ] could be next on the list, and not necessarily just for Icahn. As Cramer explained, the “embedded systems” maker would make an attractive target for some bigger tech companies.

These embedded systems consist of a microprocessor and an operating system, and they’re used in devices like car and plane braking systems, internet routers and digital-imaging products. The more complex they become, the bigger the need for WIND.

But it’s Wind River’s decision to join Google’s [GOOG Loading... () ] Open Handset alliance that has Cramer excited. Cell phones with Linux, infotainment and networking are huge growth markets, he said, so WIND should profit from the alliance. Also, there’s talk of a deal with Google, so Homegamers probably want to get in ahead of that announcement.

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The stock’s incredibly cheap right now, trading just a quarter above its 52-week low. And that’s why Cramer said WIND’s so ripe for a takeover. IBM’s interest in embedded systems makes it a likely candidate, and Motorola [MOT Loading... () ] – another company in which Icahn holds a significant stake – might want a part of a Google phone. Oracle, Cisco Systems [CSCO Loading... () ] or SAP [SAP Loading... () ] are all potentials, too.

So what would a deal like that be worth to investors? Cramer figures an Icahn-brokered deal could boost this $8 stock to the mid-teens.

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