Synplicity’s stock price jumped almost 50% less than a week after it touched a 52-week high. There is more than meets the eye in this customary market response to a declaration of acquisition. It reflects the accented synergies of hardware and software companies joining hands. It will take at least three months for all statutory approvals to come through for this stock to be acquired. The stock has inherent value even beyond the recent price spike. Hence no investor should lose a chance to acquire this stock during the autumn of its life in the small capital area.
The company is a leader in the Field Programmable Gate Array (FPGA) business. The technology involves the design and production of sophisticated systems used for prototyping new software and Information Technology products. The company which has proposed to acquire this stock is in a related business, but FPGA know-how has inherent strengths. Therefore, the stock is valuable even if the acquisition proposal does not meet with regulatory approval.
The stock has performed impressively even before its acquisition was publicly announced. Annual sales growth on a Trailing Twelve Months basis has been nearly 14% at a time of decline in the Software & Programming Industry. The stock has a balance of short-term gains, and sustainable competitive strength. Synplicity, regardless of its future ownership structure, is set to remain at the vanguard of military and civilian electronic application developments.
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