Is Radware For Real? (RDWR, HPQ, IBM)

Posted in General, Options 
September 14th, 2010

Radware Ltd. (NASDAQ: RDWR) almost felt like an enigma wrapped in a riddle today, but a 38.4% gain to $38.59 on more than a 60-times normal volume spike is too impossible to ignore.  Options trading was very elevated in the SEPT-2010 and DEC-2010 options was off the charts.

A Barron’s blog piece claimed that the Tel Aviv, Israel company, in unsourced fashion, is possibly going to be bought by Hewlett Packard Co. (NYSE: HPQ) or IBM Inc. (NYSE: IBM).  The value was offered up as $945 million or some $45.00 per share.

Shares hit a 52-week high of $39.46 before closing up 38.45 at $38.59 on more than 9 million shares.  Average volume is not even 150,000 shares.  Keep in mind that the prior 52-week trading range was $10.77 to $28.24.

Radware was under $10 just as recently as August-2008. Shares have not been this high since the tech bubble days of 2000.  Debunking a deal on price alone is often unfair, but the realization on September 14, 2010 that this could be a nice fit for a buyout to compete more in a consolidating tech world is a bit late  and it is with too much premium compared to when these companies could have all been bought for a song.


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