Wall Street reacted Monday to rumors that Garmin Ltd. may be targeted by Microsoft Corp. as an acquisition — Garmin shares jumped 5 percent as a result. Head equity traders told Bloomberg News that the speculation may be riding a wave borne of news that Nokia Oyj had agreed to buy Navteq Corp., which happens to produces data used by Garmin in its navigation programs. That buyout is credited with triggering a “who’s next” mentality among some traders and apparently Garmin is imagined as the most likely target. Others, however, put little faith in the rumors. “It doesn’t make any sense at all … Microsoft always is rumored to be buying someone,” Rob Sanderson of American Technology Research told the Kansas City Star. Sanderson says Microsoft has not yet bought another company as large as Garmin and for that reason a buyout seems unlikely. Speaking for Garmin, Ted Gartner declined comment. Garmin stock has been both volatile and pricey lately. Shares rose or fell by more than 3 percent each day through most of last week and have been pricey — over $105 per share.
Your Garmin, Now By Microsoft?
Key Takeaways:
- Rumors emerged that Microsoft Corp. might acquire Garmin Ltd., causing Garmin's shares to jump 5 percent.
- The speculation is possibly fueled by Nokia's recent acquisition of Navteq Corp., a data provider for Garmin, sparking a "who's next" mentality among traders.
- Some analysts express skepticism, noting Microsoft rarely acquires companies as large as Garmin and is frequently targeted by acquisition rumors.
- Garmin declined to comment on the acquisition speculation, while its stock has recently been both volatile and expensive.
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