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What the Heck Is Oracle Doing?

http://www.fool.com/investing/general/2013/02/05/what-the-heck-is-oracle-doing.aspx

Tim Beyers
February 5, 2013

Forget what you think you know about  Oracle (NASDAQ: ORCL). The database king is no longer. Instead, Oracle has transformed itself into an infrastructure supplier whose assets now include Acme Packet (NASDAQ: APKT).

Yesterday, Oracle announced plans to acquire the upstart telecom equipment maker for $29.25 a share -- or $2.1 billion -- in cash. The purchase price amounts to a 22% premium over Friday's close.

For me, the buyout offers too little and comes too late.

Two years ago, I recommended the stock for our Motley Fool Rule Breakers service. It's been an underperformer since. Only recently has the stock recovered -- up 84% since August -- on hopes that session border controllers, or SBCs, would prove vital for connecting voice calls over LTE networks. MetroPCS turned to Acme Packet for precisely this sort of help in November.

Now Oracle takes over, adding the company's SBC technology to its portfolio as investors question the move. Here are three thus-far unanswered questions that may help to explain why Oracle fell nearly 3% following the announcement:

  1. What advantage does Oracle gain from this deal? The biggie, especially since Oracle co-president Mark Hurd's press release comments did nothing to help clarify what his company intends to do with Acme Packet's technology. Instead, he said the deal fits with Oracle's strategy of delivering "integrated best-in-class products that address critical customer requirements in key industries." (