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Quantum Shares Jumped: What You Need to Know

By Evan Niu | More Articles
November 28, 2011 | Comments (1)

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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 data storage specialist Quantum (NYSE: QTM  ) have sped upward by as much as 14% after a Bloomberg report stoked speculation that the company may be acquired.

So what: The report in question indicated that NetApp (Nasdaq: NTAP  ) may need to look at acquisitions to compete with rival EMC (NYSE: EMC  ) , and that CommVault Systems (Nasdaq: CVLT  ) and Quantum would both be attractive candidates. NetApp has seen weakness in Europe amid troubling macroeconomic conditions while EMC holds more market share in the area.

Now what: The ISI Group believes that NetApp should now use its $4.6 billion of cash on the balance sheet for takeovers as organic revenue growth has slowed, and ISI named Quantum as an attractive target while Robert W. Baird & Co. said CommVault would be a good fit. ISI analyst Brian Marshall said picking up Quantum makes sense since NetApp already resells Quantum's offerings. NetApp and EMC had both bid on deduplication specialist Data Domain in 2009 before EMC won out, and buying Quantum would give NetApp exposure to deduplication.

Interested in more info on Quantum Corporation? Add it to your watchlist by clicking here.

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Fool contributor Evan Niu holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of EMC. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 30, 2011, at 3:26 PM, djohnston4 wrote:

    NetApp clearly missed a huge opportunity when they lost the Data Domain bidding war with EMC. EMC has grown the BRS business 50% y/y since the acquisition, and NetApp still lacks dedupe.

    Better acquisition candidates would be a company like Arkeia Software, with better dedupe than DD and an appliance. In fact, NetApp announced a partnership with Arkeia today, so I'm sure something is going on.

    Quantum is in a declining business that NetApp should want nothing to do with. CVLT is a good company, but would be too expensive at $2B+ (eg more than Data Domain), and has no appliance.

    Time for NetApp to finally get a compelling dedupe play.

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Related Tickers

5/25/2012 4:04 PM
QTM $1.89 Down -0.01 -0.53%
Quantum Corp CAPS Rating: **
NTAP $28.61 Down -0.21 -0.73%
NetApp CAPS Rating: ***
EMC $24.24 Up +0.01 +0.04%
EMC Corp CAPS Rating: *****
CVLT $47.97 Down -2.04 -4.08%
CommVault Systems,… CAPS Rating: **

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