Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Fusion-io Rises on Speculation It Might Be the Next Flash Company to Sell Out

fusion-nyseShares of Fusion-io are rising like crazy today in the wake of a pair of acquisitions of two competitors, and speculation by an analyst that it could be next.

Fusion shares rose by more than $2, or more than 15 percent, to $15.31 a share, after Pacific Crest Securities analyst Brent Bracelin published a slide deck arguing that the company could sell for between $22 and $27 a share in a takeover by another company.

The speculation comes on the heels of yesterday’s $415 million acquisition of Whiptail by Cisco Systems, and of Virident Systems by Western Digital for $685 million the day before that.

Fusion’s flash technology accelerates enterprise computing gear by speeding the process by which data is fed from the storage to the microprocessor, shortening a costly computing bottleneck. It has landed several high-profile customers, including investment bank Credit Suisse, as well as Facebook and Apple, both of which use its technology in their data centers.

In a presentation to clients, Bracelin argued that Whiptail and Virident sold for valuations of about 10 times sales. After accounting for the value of its technology and the relative scarcity of companies that do what Fusion does, it could sell for a higher premium than either Virident or Whiptail, he wrote.

A buyout price of $22 to $27 a share works out to a buyout price between $2 billion and $2.7 billion. Bracelin didn’t speculate about who a potential buyer might be.

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