Why RF Micro Devices, Inc. Shares Jumped Today
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 RF Micro Devices, jumped 21% Monday after the company announced it would merge with TriQuint Semiconductor .
So what: The all-stock transaction is expected to close in the second half of this year, will create a new company with combined revenue of more than $2 billion, and should result in cost synergies of at least $150 million the first two years after closing.
Former shareholders of RF Micro and TriQuint will each own half of the combined company post-merger, and RF Micro shareholders specifically will receive one share of the new company for each share of RF Micro they already own. Upon closing, the companies will execute a one for four reverse stock split resulting in approximately 145 million shares outstanding.
Now what: To be sure, today's press release points out the merger combines two companies with largely complementary product sets, which could effectively serve to boost their prospects for supplying a larger chunk of the chips required by electronics titans like Samsung and Apple. As a result, while I wouldn't go diving in head first today, I still can't blame RF Micro Devices shareholders for hanging onto at least part of their positions even after the pop.
If you took profits...
But I also wouldn't blame you for taking some of your profits off the table. If you're wondering where to put that money to work, you're in luck!
Let's face it, every investor wants to get in on revolutionary ideas before they hit it big. Like buying PC-maker Dell in the late 1980s, before the consumer computing boom. Or purchasing stock in e-commerce pioneer Amazon.com in late 1990s, when it was nothing more than an upstart online bookstore. The problem is, most investors don't understand the key to investing in hyper-growth markets. The real trick is to find a small-cap "pure play," and then watch as it grows in EXPLOSIVE lockstep with it's industry. Our expert team of equity analysts has identified one stock that's poised to produce rocket-ship returns with the next $14.4 TRILLION industry. Click here to get the full story in this eye-opening report.
The article Why RF Micro Devices, Inc. Shares Jumped Today originally appeared on Fool.com.
Steve Symington owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and TriQuint Semiconductor. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
