What happened
Shares of Silicon Laboratories (NASDAQ:SLAB) surged as much as 10% this afternoon after rumors began to circulate about the chipmaker potentially offloading one of its business units.
So what
Silicon Labs is a technology company that builds semiconductors, as well as other devices and software for Internet of Things (IoT) infrastructure, industrial automation, and other consumer and automotive products.
This afternoon, Bloomberg, citing anonymous sources, reported that the company is considering selling its analog chip business, which could go for as much as $2 billion or $3 billion, or more.
Image source: Getty Images.
Bloomberg also reported that if the company does sell its analog chip business, it would likely turn its attention to its IoT business, which already accounts for the bulk of its revenue.
Now what
There may be a few things contributing to the rise in shares. For one, rumors of an acquisition often tend to benefit the selling party because it can sell itself or a part of the company for a premium.
Investors also may be pleased to see the company focusing more heavily on its IoT business.
Either way, keep an eye on the company because Silicon Labs could instead choose to keep the unit after looking at bids and potential buyers, which could ultimately result in the stock losing some of its recent gains. On the other hand, the successful sale of the unit could result in further stock price appreciation.
