The Wall Street Journal reported today that Brocade Communications Systems (BRCD) is putting itself up for sale. This is a good omen for the market and for the tech sector in particular. Despite the market pulling back a bit from its high, companies like Brocade see that money is coming into the market and they have made it publicly known that they want a piece of the action.
The Wall Street Journal says that companies like Oracle (ORCL) and Hewlett-Packard (HWP) are potential bidders. I won’t say hazard a guess who will end up buying Brocade because a bidding war could start. The important point for investors is that the market is taking this very seriously. Shares of Brocade are already up 14% today. This is another reason why investors ought to focus their portfolios on fundamentally superior stocks.
I would also think that companies like Dell (DELL), Cisco (CSCO) and IBM (IBM) might have an interest in picking up Brocade. Here’s more of what I wrote recently on the merger boom.