Trading volume in shares of software company BEA Systems Inc. has tripled
recently, presumably on news that the company's sales would be lower than
anticipated for the first quarter. However, analysts have used the potential of
a buyout offer to appease investors disappointed by the earnings. Friedman
Billings Ramsey & Co. analyst David Hilal said in a research note Tuesday:
"Despite our negative view on the fundamentals, today's weakness could help
renew takeout speculation that could put a floor on the shares."
That might be good news if you're willing to get into the stock now and hope for
a buyout, but an
analysis
by Seeking Alpha points out that there aren't many activist investors
holding BEA stock at the moment and there is little reason to think someone
might come in with an offer. The report suggests that because a company is
struggling does not mean it automatically becomes a target for a private equity
firm. Indeed, despite recent
laudatory
coverage for buyout firms, they are viewed by some as carrion eaters or
crop
destroyers. —Stacey Higginbotham
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