A few months ago, I studied the numbers of Opsware and was stumped. A solid company with savvy management (Marc Andreessen) that trades below $10 per share. A relatively small market cap. By mid-June, I gave OPSW a B+ rating, but did nothing more. Didn't buy a share though the stock was cheap at $8.22.
This morning, Hewlett Packard jumped all over OPSW with an offer of $14.25 per share. That's worth $1.6 billion, a $500 million premium on OPSW's market cap last week of $1.1 billion. OPSW, which closed at $10.28 on Friday, is up to $14.05 in pre-market trading. HPQ is trading just 4 cents below it's Friday close of $48.54.
The ride has been swift in the past week for Opsware, which had pushed up after a partnership deal with Solidcore. Opsware shareholders can't help but be happy with the 38% premium, but how many of them will be content to hold HP shares? HP is a Co gaining a lot of momentum with shrewd moves, so it might not be bad at all.
Pupule Paul has no position in OPSW and HPQ.
