Akamai (AKAM) Mulled as Takeover Target Following Recent Stock Drop
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Does the recent drop in Akamai (Nasdaq: AKAM) make it a more attractive takeover target?
According to Bloomberg Wednesday: possibly. Akamai has plunged 57 percent over the last 52-week period, pushing its market cap from $9.9 billion to about $3.8 billion. The stock is currently going for 7.6x EBITDA, down about 66 percent from the same period last year.
Basically, it's more affordable than 94 percent of the largest U.S. Internet software companies.
Who might be interested? Rivals like International Business Machines (NYSE: IBM) and Verizon Communications (NYSE: VZ) might take a gander.
Despite shares dropping after missing earnings forecasts last quarter, Akamai is still poised to report record revs in 2011 as Internet users continue to grow, paving the way for more server space so websites run faster.
But this isn't the first time the move has been suggested. Akamai has been subject of the most buyout rumors from 2005 through 2010. Co-founder Tom Leighton, speaking in an interview Tuesday, said Akamai doesn't see "any need to be bought, but that Akamai is "very attractive." Leighton even suggested Akamai might become the acquirer.
IBM has been rumored to be looking to bolster it's $22.5 billion software business, though speculation surrounds the company spending just $100 million to $300 million on acquisitions. If this is the case, Akamai competitor LimeLight Networks (Nasdaq: LLNW), at a market cap of $241 million, might be the first to go.
Verizon might also seek to improve it's network capability and charge more for better and faster Internet delivery to customers.
Shares of Akamai are up 1 percent in pre-market action.
According to Bloomberg Wednesday: possibly. Akamai has plunged 57 percent over the last 52-week period, pushing its market cap from $9.9 billion to about $3.8 billion. The stock is currently going for 7.6x EBITDA, down about 66 percent from the same period last year.
Basically, it's more affordable than 94 percent of the largest U.S. Internet software companies.
Who might be interested? Rivals like International Business Machines (NYSE: IBM) and Verizon Communications (NYSE: VZ) might take a gander.
Despite shares dropping after missing earnings forecasts last quarter, Akamai is still poised to report record revs in 2011 as Internet users continue to grow, paving the way for more server space so websites run faster.
But this isn't the first time the move has been suggested. Akamai has been subject of the most buyout rumors from 2005 through 2010. Co-founder Tom Leighton, speaking in an interview Tuesday, said Akamai doesn't see "any need to be bought, but that Akamai is "very attractive." Leighton even suggested Akamai might become the acquirer.
IBM has been rumored to be looking to bolster it's $22.5 billion software business, though speculation surrounds the company spending just $100 million to $300 million on acquisitions. If this is the case, Akamai competitor LimeLight Networks (Nasdaq: LLNW), at a market cap of $241 million, might be the first to go.
Verizon might also seek to improve it's network capability and charge more for better and faster Internet delivery to customers.
Shares of Akamai are up 1 percent in pre-market action.
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