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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Western Digital (NYSE: WDC ) soared more than 10% in intraday trading today after rumors surfaced that data storage peer Seagate Technology (NYSE: STX ) is being shopped to an acquirer.
So what: As often happens when buyout rumors surface, Seagate rose more than 20% on the news. Western Digital appears to be rising for no other reason because it offers much of what Seagate offers. Call it a sympathy pop.
Now what: I'm not usually one to advocate buying when the speculative sharks are circling, especially in a competitive market like data storage, where emerging solid-state drive suppliers STEC (Nasdaq: STEC ) and SanDisk (Nasdaq: SNDK ) are growing more formidable. Still, the Seagate rumors could've created an opportunity. Western Digital is cash-rich and blessed with a strong brand name in an important market. More institutions are going to see that now, and that means more institutional buying and higher prices.
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