Cash Rich in a Cruddy Economy: The Perfect Storm for Technology Takeovers

The Takeover Trader Email – #262
By Louis Basenese

As the market plumb’s new depths, we have two choices. Either pack it in. Or keep hunting for opportunities. As you probably guessed, I’m opting for the latter. And for good reason…

Prices for most stocks – particularly small technology firms – are down significantly, below cash in many instances. Yet the titans of the industry – Oracle, Cisco, and Microsoft – are sitting cash heavy with $29.5 billion, $20.7 billion and $10.6 billion, respectively.

Like a proverbial kid in a candy store with a five-dollar bill, don’t expect it to last very long…

In the past year, Oracle made more than a few impulse buys, scooping up 10 smaller firms for a combined $750 million. And CEO Larry Ellison is an unashamed takeover addict, not interested in quitting.

At Cisco, CEO John Chambers recently remarked, “Cash is king, queen and the royal family” in a recession. No king sits idly on the throne.

Not to be outdone, Microsoft executive Chris Liddell recently said the buying opportunities have “probably never been better.” Not a comment one makes, unless they’re out shopping.

So today, let’s place our bets on the most like target for acquisition…

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