Akamai (AKAM) Takes Out Competitor, But May Have Stepped Onto The Chopping Block
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Price: $110.42 +0.30%
Rating Summary:
18 Buy, 20 Hold, 2 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
18 Buy, 20 Hold, 2 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Collins Stewart maintains a 'Neutral' on Akamai Technologies (NASDAQ: AKAM) price target of $31.00.
Collins analyst says, "This morning, Neutral rated Akamai announced that it will acquire Cotendo, a company that competes directly with Akamai for what it used to refer to as its Value Added Services business (or VAS) business...Akamai will pay $268mm in cash for Contendo who is reported to have roughly 100 employees. We estimate the company generates roughly $30mm in annual revenues with roughly 350 customers."
"Relationship with AT&T (NYSE: T) in question: Prior to the announcement of the acquisition, it was our understanding that through its partnership with AT&T and the access to its large embedded enterprise customer base, Cotendo was experiencing significant success in offering Akamai like service to this large base of customers. Therefore it is possible that this acquisition is at least partially defensive for Akamai. Assuming the relationship between AT&T and Contendo survives the merger and that Akamai can further enhance its capabilities with AT&T, it would then be possible for us to envision a scenario whereby Akamai itself becomes a logical acquisition target. To date, we had believed the never-ending M&A speculation surrounding Akamai has largely been without merit."
For an analyst ratings summary and ratings history on Akamai Technologies click here. For more ratings news on Akamai Technologies click here.
Shares of Akamai Technologies closed at $26.67 yesterday.
Collins analyst says, "This morning, Neutral rated Akamai announced that it will acquire Cotendo, a company that competes directly with Akamai for what it used to refer to as its Value Added Services business (or VAS) business...Akamai will pay $268mm in cash for Contendo who is reported to have roughly 100 employees. We estimate the company generates roughly $30mm in annual revenues with roughly 350 customers."
"Relationship with AT&T (NYSE: T) in question: Prior to the announcement of the acquisition, it was our understanding that through its partnership with AT&T and the access to its large embedded enterprise customer base, Cotendo was experiencing significant success in offering Akamai like service to this large base of customers. Therefore it is possible that this acquisition is at least partially defensive for Akamai. Assuming the relationship between AT&T and Contendo survives the merger and that Akamai can further enhance its capabilities with AT&T, it would then be possible for us to envision a scenario whereby Akamai itself becomes a logical acquisition target. To date, we had believed the never-ending M&A speculation surrounding Akamai has largely been without merit."
For an analyst ratings summary and ratings history on Akamai Technologies click here. For more ratings news on Akamai Technologies click here.
Shares of Akamai Technologies closed at $26.67 yesterday.
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