Halftime Report: Trading Tech Amid Takeout Frenzy
M&A dominated headlines on Monday again with the Street digesting the latest big tech takeover.
This time, IBM inked a deal to buy data analytics company Netezza for $27 per share, almost a 10% premium from Friday's closing price of $24.60.
In the wake of the news, rivals CommVault and Teradata traded at or near 52-week highs.
Considering the bidding war that erupted recently over 3PAR , what’s the tech trade, now?
Instant Insights with the Fast Money traders
As far as I’m concerned the question becomes, ‘what does Dell do now,” muses Joe Terranova. (Remember, Dell lost the bidding war for 3PAR to HP .)
The fact that Netezza is trading above $27 suggests at least some investors believe there could be another buyer. Cisco, HP, and now IBM have all made major purchases. I’d think Dell has to come out and do something.
Roth Capital analyst Nathan Schneiderman says there could be higher bids for Netazza - potentially from Hewlett Packard, despite the company's other acquisitions, reminds host Melissa Lee.
If you’re looking for a trade, long-term I still like HP, says Patty Edwards, however if they step in and bid for Netazza, I’d be concerned about what that does to share price in the short-term.
Looking elsewhere in tech, Google hit a new 52-week high on Monday and Apple is approaching that level as well, adds host Melissa Lee.
I’m seeing clients step into big cap tech, says Steve Grasso, but it seems the only want marquis names in this space.
THE OIL TRADE
Oil prices rose on Monday, snapping a four-day slump, after published reports suggested the week-long shut down of Enbridge’s Canada-to-U.S. pipeline (restarted on Friday) may have pushed down inventories.
What’s the trade?
It seems like there’s a lot of short covering in the space, says Steve Grasso. That may trigger a short term pullback but long-term I believe the sector trades higher.
Looking at the longer dated contracts, I would not go short energy either, says Joe Terranova.
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Trader disclosure: On Sept. 20th, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Terranova Owns (AAPL), (FCX), (IBM); Terranova is chief market strategist of Virtus Investment Partners, LTD.; Edwards own (AAPL) for clients; Edwards own (AMZN) for clients; Edwards own (GOOG) for clients; Edwards own (IBM) for clients
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