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BOSTON, Oct 4 (Reuters) - Nvidia Corp. shares climbed more than 8
percent on Wednesday amid speculation the graphics chipmaker could be
acquired by Intel Corp., traders said.
A spokeswoman for Intel, the world's No. 1 chipmaker, declined comment,
saying her company doesn't comment on market speculation. A spokeswoman
for Nvidia could not be reached.
Nvidia shares rose $2.32 to $30.62 in afternoon Nasdaq trade. Some 20
million shares changed hands, about double the three-month daily
average.
Investors have been speculating that Nvidia might be acquired since
July, when Advanced Micro Devices Inc. agreed to buy Nvidia rival ATI
Technologies Inc. for $5.4 billion. Rumors of such a transaction
resurfaced on Wednesday, spreading quickly across Wall Street trading
desks, according to three options market participants.
"There is speculation that Intel will make an acquisition announcement
tonight," said Bill Lefkowitz, options strategist at brokerage firm
vFinance Investments in New York.
Investors bought up call options contracts, hoping to profit from a
surge in Nvidia shares if the company is acquired at a premium to its
current share price.
Before noon more than 33,500 Nvidia calls were traded in the U.S.
options market, more than twice their normal volume over the last 20
trading days, according to market research firm Track Data.
Some observers said that they doubt Intel would buy Nvidia because it's
too expensive. The company has a stock market capitalization of about
$10 billion, which means it would demand a far higher price than what
AMD is paying for ATI.
AMD's purchase of ATI allows the Intel rival to enter a new market as
it currently doesn't make graphics chips.
An Intel acquisition of Nvidia wouldn't have that appeal because Intel
already sells graphics chips, an area where it has been expanding by
hiring engineers specialized in that field, said Pacific Growth
Equities analyst Satya Chillara. Additionally, Nvidia Chief Executive
Jen-Hsun Huang isn't ready to hand over control of the company,
Chillara said.
"There are psychological, emotional and financial variables at play,"
he added.
BOSTON, Oct 4 (Reuters) - Nvidia Corp. shares climbed more than 8
percent on Wednesday amid speculation the graphics chipmaker could be
acquired by Intel Corp., traders said.
A spokeswoman for Intel, the world's No. 1 chipmaker, declined comment,
saying her company doesn't comment on market speculation. A spokeswoman
for Nvidia could not be reached.
Nvidia shares rose $2.32 to $30.62 in afternoon Nasdaq trade. Some 20
million shares changed hands, about double the three-month daily
average.
Investors have been speculating that Nvidia might be acquired since
July, when Advanced Micro Devices Inc. agreed to buy Nvidia rival ATI
Technologies Inc. for $5.4 billion. Rumors of such a transaction
resurfaced on Wednesday, spreading quickly across Wall Street trading
desks, according to three options market participants.
"There is speculation that Intel will make an acquisition announcement
tonight," said Bill Lefkowitz, options strategist at brokerage firm
vFinance Investments in New York.
Investors bought up call options contracts, hoping to profit from a
surge in Nvidia shares if the company is acquired at a premium to its
current share price.
Before noon more than 33,500 Nvidia calls were traded in the U.S.
options market, more than twice their normal volume over the last 20
trading days, according to market research firm Track Data.
Some observers said that they doubt Intel would buy Nvidia because it's
too expensive. The company has a stock market capitalization of about
$10 billion, which means it would demand a far higher price than what
AMD is paying for ATI.
AMD's purchase of ATI allows the Intel rival to enter a new market as
it currently doesn't make graphics chips.
An Intel acquisition of Nvidia wouldn't have that appeal because Intel
already sells graphics chips, an area where it has been expanding by
hiring engineers specialized in that field, said Pacific Growth
Equities analyst Satya Chillara. Additionally, Nvidia Chief Executive
Jen-Hsun Huang isn't ready to hand over control of the company,
Chillara said.
"There are psychological, emotional and financial variables at play,"
he added.