What happened

Shares of enterprise-cloud specialist Nutanix (NTNX 2.55%) traded sharply up on Monday. The stock, which had been hammered by investors during the recent tech-stock sell-off, closed the day more than 5% higher, trouncing even the sprightly bounce of the S&P 500 index. A hot rumor of a potential takeover stoked that flame.

So what

DealReporter, a long-standing website that tracks mergers, acquisitions, and related activity in the corporate world, reported Monday that Nutanix might be in play. A post on the site indicated that large private-equity firm Bain Capital is mulling a buyout of the cloud company.

Person using a smartphone while seated at a desk with a laptop.

Image source: Getty Images.

Bain Capital is already involved in Nutanix, with a $750 million position in convertible senior notes issued by the company. It bought the notes in 2020.

Reporting on the DealReporter piece, StreetInsider said an unnamed Nutanix spokesperson told it that, "[W]e don't comment on rumors or speculation." Bain Capital refused to comment.

These events closely follow an analysis from Sanford C. Bernstein prognosticator Toni Sacconaghi that ever-powerful International Business Machines could be eager to acquire a relatively bargain-priced tech company. Sacconaghi identified 32 potential targets in a research note published last Friday, and Nutanix was one of them.

Now what

Nutanix is undeniably an attractive target for a potential new buyer with sufficient capital. The company has been hit hard by investors, who have grown notably more bearish on assets seen to be speculative.Tech stocks are usually lumped into that classification. And although Nutanix is chronically unprofitable, it's still growing and has a habit of beating analyst bottom-line estimates.