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Trading Chips After the TXN Deal

Tech investors scrambled to place their next bets after Texas Instruments surprised the Street after the bell with its acquisition of rival National Semiconductor for $6.5 billion or $25/ share.

That’s a 77% premium over National Semiconductor's share price of $14.07 at the end of trading Monday.

Although that seems like a sizable premium, FBR analyst Craig Berger tells Fast Money in a live interview that he thinks Texas Instruments is paying a fair price. “While it looks like Texas Instruments is paying a lot, there are a lot of synergies to be had." He thinks when you factor in those synergies they’re paying something less.

The boards of directors of both companies have unanimously approved the transaction.

What’s the trade?

Karen Finerman says she wouldn’t touch these stocks here. “The downside is enormous and I’m not clear if there's any more upside," she says.

Joe Terranova largely agrees. "In the recovery cycle, we're in the later innings, now. I'd only stay with names that are not hyper-sensitive to the cyclicality. And I'd move away from names like Marvel and NVIDIA ," he says.

FBR's Craig Berger tells us he’s constructive on the chip space broadly but also reminds that the space has experienced a monster rally from Labor Day until mid-February. And "we're going into a seasonally slow period, so it's hard to get excited about the group," he says.

“However, with deals like this, at 10-12 times, there are still a lot of inexpensively priced chip stocks,” he says. "It could still be an attractively priced group based on fundamentals."

Although Berger didn't want to speculate about the next takeout target he did say that he rates Maxim Integrated as an outperform.

Guy Adami also likes Maxim. However, he likes rival Linear Tech a little better. “I’d go to Linear Tech,” he says.

Brian Kelly is short the SMH and says the deal doesn’t change his outlook.

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MARKET BUZZKILL: FINANCIALS

As you likely know, financials have been performing quite poorly, lately.

How should you trade it?

Guy Adami thinks the next leg of the rally needs to be driven by the financials but “they just don’t get out of their own way. For now I think they’re in a void.”

Joe Terranova thinks it’s important to pick and choose in this space. He’s bullish Blackstone, JPMorgan as well as Mastercard and Visa .






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Trader disclosure: On April 4, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Seymour owns (AA); Seymour owns (AAPL); Seymour owns (CSCO); Seymour owns (F); Seymour owns (GE); Seymour owns (MOS); Seymour owns (SBUX); Adami owns (AGU); Adami owns (C); Adami owns (GS); Adami owns (INTC); Adami owns (MSFT); Adami owns (NVC); Adami owns (BTU); Terranova owns (C); Terranova owns (JPM); Terranova owns (UPL); Terranova owns (PBR); Terranova owns (TCK); Terranova owns (CNQ); Terranova owns (CVI); Terranova owns (AKAM); Terranova owns (XOM); Terranova owns (BAX); Terranova owns (VRTS); Finerman and Finerman's Firm own (AAPL); FInerman's firm owns (BMW); Finerman and Finerman's Firm own (CMI); Finerman and Finerman's Firm own (BP); Finerman's Firm owns (GM); Finerman owns (GOOG); Finerman's Firm owns (JPM) and (JPM) leaps; Finerman owns (JPM); Finerman and Finerman's firm owns (MSFT); Finerman owns (RIMM); Finerman's firm is short (IJR); Finerman's firm is short (IWM); Finerman's firm is short (SPX); Finerman's firm is short (XRT); Finerman's firm is long S&P 500 puts; Finerman's firm is long RUssell 2000 puts; Finerman's Firm Owns BMW

For Brian Kelly
Accounts Managed by Kanundrum Capital are long gold
Accounts Managed by Kanundrum Capital are long silver
Accounts Managed by Kanundrum Capital are long wheat
Accounts Managed by Kanundrum Capital are long oil
Accounts Managed by Kanundrum Capital are long natural gas
Accounts Managed by Kanundrum Capital own (MCP)
Accounts Managed by Kanundrum Capital own (EBAY)
Accounts Managed by Kanundrum Capital own (MON)
Accounts Managed by Kanundrum Capital own (DBA)
Accounts Managed by Kanundrum Capital own (VLO)
Accounts Managed by Kanundrum Capital own (ATW)
Accounts Managed by Kanundrum Capital own (RDC)
Accounts Managed by Kanundrum Capital are long (FXY) puts
Accounts Managed by Kanundrum Capital are long VIX calls
Accounts Managed by Kanundrum Capital are short (JJC)
Accounts Managed by Kanundrum Capital are short copper
Accounts Managed by Kanundrum Capital are short (XLF)
Accounts Managed by Kanundrum Capital are short (SMH)

For Joe Terranova
Terranova is Chief Market Strategist of Virtus Investment Partners, LTD
Virtus Investment Partners Owns More Than 1% Of (ABAX)
Virtus Investment Partners Owns More Than 1% Of (AMKR)
Virtus Investment Partners Owns More Than 1% Of (CCG)
Virtus Investment Partners Owns More Than 1% Of (CASS)
Virtus Investment Partners Owns More Than 1% Of (CSVI)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (FCFS)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (KRC)
Virtus Investment Partners Owns More Than 1% Of (LDR)
Virtus Investment Partners Owns More Than 1% Of (NCRI)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (XLE)
Virtus Investment Partners Owns More Than 1% Of (XLF)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (XLK)
Virtus Investment Partners Owns More Than 1% Of (XLU)
Virtus Investment Partners Owns More Than 1% Of (WDFC)
Virtus Investment Partners Owns More Than 1% Of (YDNT)
Virtus Investment Partners Owns More Than 1% Of DOMINO'S PIZZA UK & IRL
PLC

For Dennis Gartman
Funds managed by Dennis Gartman are Long Corn
Funds managed by Dennis Gartman are Long Copper
Funds managed by Dennis Gartman are Long Soybeans
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Funds managed by Dennis Gartman are Long Crude
Funds managed by Dennis Gartman are Long Nat. Gas
Funds managed by Dennis Gartman are Long Australian Dollars
Funds managed by Dennis Gartman are Long Canadian Dollars
Funds managed by Dennis Gartman are Long Gold
Funds managed by Dennis Gartman are Long Swiss Franc
Funds managed by Dennis Gartman are Short Euros
Funds managed by Dennis Gartman are Short British Pound Sterling
Funds managed by Dennis Gartman are Short 10-yr u.s. treasuries
Funds managed by Dennis Gartman are Short Canadian Bond

For John Stephenson
First Asset Management owns (SLW)
First Asset Management is long silver futures
First Asset Management owns (SLV)
First Asset Management owns (PAAS)
First Asset Management owns (SSRI)
Stephenson owns (SLW)
Stephenson is long silver futures
Stephenson owns (SLV)
Stephenson owns (SSRI)

For Tim Seymour
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For Mike Khouw
Cantor Fitzgerald is a market marker in (INTC)

For Craig Berger:
FBR Capital Markets Is A Market Maker In (MXIM)

For John Mauldin
**No Disclosures

For Joe LaVorgna
**No Disclosures

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