Cavium Inc (NASDAQ: CAVM) sprouted on markets Monday, amid word from the Wall Street Journal that Marvell Technology (NASDAQ: MRVL) is in advanced talks to merge with Cavium.
The Journal story read that Cavium shareholders would receive a modest premium, the report said, citing people familiar with the matter. A deal could be announced in the next few weeks if talks do not fall apart.
As of Friday’s close, Cavium had a market capitalization of about $4.5 billion, while Marvell had a valuation of over $9 billion.
Midway through last week, Cavium, the San Jose-based provider of semiconductor products that enable intelligent processing for enterprise, data center, cloud, wired and wireless networking, announced third-quarter results that warmed investors’ hearts.
Net revenue was $252.0 million, a 4.1% sequential increase from the $242.1 million reported in the second quarter of 2017 and 49.9% from the $168.1 million reported in the third quarter of 2016.
Net loss for the third quarter of 2017 was $6.2 million, or ($0.09) per diluted share, compared to $11.1 million, or ($0.16) per diluted share in the second quarter of 2017. Gross margins were 54.6% in the third quarter of 2017 compared to 53.5% in the second quarter of 2017.
As a percentage of revenue, GAAP income from operations was 0.19% in the third quarter of 2017 compared to GAAP operating loss of 2.5% in the second quarter of 2017.
Total cash and cash equivalents were $152.7 million at September 30.
Monday, Marvell shares rocketed $1.70, or 9.2%, to $20.21, while Cavium shares zoomed $7.73, or 11.3%, to $76.00
