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: Brocade Communications Systems (Nasdaq: BRCD ) jumped from a slight loss to a 10% gain midday on buyout rumors.
So what: Reuters is reporting that Brocade has received a first round of bids from potential private-equity buyer, according to an unnamed source. Reports are that the company hired Qatalyst Partners as an investment banker to initiate the sale process.
Now what: So far, these reports are just rumors, but the market reacted strongly, sending shares straight higher midday. If you buy shares on this news, I would buy based on fundamentals and not rumors. Rumors can wind up being false or a deal can fall apart, leaving investors holding the bag after a run-up like this. Until the company confirms or denies reports, this Fool is staying put.
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