The Broadcom/Brocade deal has been delayed for a review by the U.S. Committee on Foreign Relations; analysts believe the deal will still occur, which may give time for the stock to rise for a sweeter buyout.
Brocade Communications Systems, Inc. (BRCD)
From The Buyback Letter
San Jose, Calif.-based Brocade Communications Systems, Inc. (BRCD), a computer networking company, makes networking switches, software and storage products. It has been in the news lately as semiconductor manufacturer Broadcom just got permission from the FTC to buy Brocade for $5.9 billion ($12.75 per share in cash), after months of antitrust concerns. (Broadcom is known for its connectivity chips used in products ranging from mobiles to servers.)
Extreme Networks also made an agreement with Broadcom to acquire Brocade’s data-center switching, analytics and routing business, for an all-cash deal of $55 million. And AT&T acquired Brocade’s Vyatta network operating system, including several dozen Brocade employees.
This was the latest development in the chip industry, as companies prepare for growing demand for chips in connected devices and cars.
Q2 results showed a fiscal second-quarter loss of $11 million, after reporting a profit in the same period a year earlier. Revenue was $553 million in Q2. Revenue for fiscal year 2016 was $2,346 million, up 4% year-over-year.
Management has reduced shares outstanding by 12.253% in the last 12 months.
David R. Fried, The Buyback Letter, www.buybackletter.com, 888-289-2225, July 28, 2017