Fleetwood Mac Market

Rumours made the members of Fleetwood Mac rich. This market will make bankers and corporate management teams rich.  And Main Street?  They have a saying in Vegas…

Good Luck

Today’s price action in 3COM Corporation (COMS-NASDAQ)) was a rude reminder of what can go wrong.  Speculators ramped the stock to over $5 earlier this fall on chatter that was close...but no cigar. 

Of course close is fantastic...if you are playing horseshoes.

Here is a small sample the rumor mill over the last 24 hours...let see how many pan out.

Level 3 trades to session highs; strength attributed to GOOG-for-LVLT rumor (5.08 +0.09) -Update : There has been takeover chatter on LVLT in the past, most recently in late-October.

Dollar General spikes to session high after MergerMarket analyst on CNBC names co as LBO target (16.65 +0.76)

Private equity firms buying component cos; see upside opportunity for ADI, LLTC, ALTR, TXN, MXIM with more efficient use of balance sheet - Prudential

Prudential notes that private equity firms have been buying component cos, like Freescale, TI’s Sensors Business, and Philips Semiconductor because semiconductor cycles are muting, and many cos are seeing lower capex intensity as they move to fabless/fab-lite models—which has translated to higher, and more predictable cash flow streams for the group in general. Firm thinks that another important reason is that semiconductor cos and their balance sheets are being managed too conservatively relative to the lower risks they now face. They think that if semiconductor boards don’t rationalize balance sheets to reflect their lower risk profiles, then LBO firms may step in and do it for them. The stocks that the firm believes have the most opportunity for upside through more efficient use of their balance sheets include: ADI, LLTC, ALTR, TXN, MXIM.

Tempur-Pedic strength attributed to takeover chatter (21.44 +0.68) -Update-
Note that the stock gapped up to a new 52-week high this morning.

Shares of Hilton (HLT) and Starwood (HOT) trading higher
In a pre-open note, Bear Stearns examined the potential LBO interest in HLT and HOT, given the market’s recent LBO interest. The firm suggested that a $40 price was possible for HLT and $75 was possible for HOT. Firm remains positive on the stocks on a standalone basis, with an outperform rating for both.

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