Brocade Communications Shares Popped: What You Need to Know

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.

Interested in more info on Brocade Communications? Add it to your watchlist.

Fool contributor Travis Hoium has no position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw.

Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

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.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1754921, ~/Articles/ArticleHandler.aspx, 10/21/2014 3:06:57 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement