Friday, May 14, 2010

Interesting Action in Tibco Software (TIBX) Yesterday; Speculation after SAP (SAP) - Sybase (SY)?

One of the names that withstood yesterday's late day selloff was Tibco Software (TIBX) which I added in the closing moments Tuesday. Please note the volume explosion - rather than the typical 2.8M shares trading we saw 10x that (28m!) trade Wednesday.

Interestingly, after the bell Tuesday it was announced that German software giant SAP (SAP) was bidding a 56% premium for Sybase (SY). One of my closings line in my Tibco purchase entry was:

With tech companies cash rich, this is the type of company always circling the water cooler as a potential take out candidate so there is always that potential icing on the cake.

Essentially Oracle (ORCL) and SAP (SAP) (throw some IBM in there too) have consolidated entire swathes of the software biz - frankly not sure why it has not reached a point of anti trust but it is what it is. It seems improbable that SAP will already be making another purchase after a $6B bid the previous day but the action in Tibco raises some eyebrows.

Looking at yesterday's intraday chart is also interesting - the stock was falling off with everything else than with about 90 minutes left in the session it did a U-turn, volume exploded and the stock V shaped up.

Apparently 212 put contracts were bought yesterday v 5565 calls, so someone could be speculating or it simply could be a case of self reinforcing action... computer A sees option activity, and buys options itself, which triggers computer B to rush into the stock which triggers... well you know how it goes.

Could be nothing, could be something.


  • “SAP has made no secret of wanting to do a meaningful deal, but not many would have guessed it would be Sybase. They need to strengthen their middleware offering, but instead they have bought a database vendor that competes in a market dominated by Oracle,” said Paul Guely, managing partner at Arma Partners, the technology advisory company.
  • SAP is thought to have considered a number of targets, including Tibco, the Nasdaq-listed company that provides “middleware,” or technology that connects applications. Some analysts say this might have been a better deal.

Long Tibco Software in fund; no personal position

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