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: Shares of NetLogic Microsystems
So what: Broadcom is paying an incredible 57% premium from Friday's closing price for NetLogic to expand the company's product line in network communication chips. NetLogic shareholders will be paid $50 per share, giving the deal a total value of $3.7 billion net of cash.
Now what: Some analysts are scratching their heads over the price Broadcom is paying for NetLogic, but few question that it is a wise deal for both sides. Baird analyst Tristan Gerra said that "the acquisition is synergetic for Broadcom, providing long-term growth opportunities." Considering that NetLogic is closing in on the offer price, it might be time to set a limit order and cash out to avoid the risk of a deal closing. I wouldn’t be in a greedy mood after the 50% gain today.
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