NetApp Inc. (NTAP) has been a technology hot potato lately. It has been subject estimated earnings, ratings and price target reductions over the past month.
NetApp’s also been at the center of a substantial amount of takeover speculation. When IBM agreed to buy Sun Microsystems, Inc. (JAVA), Barron’s claimed this to be a negative development for NTAP as the likelihood of NTAP being acquired was reduced.
Now that the IBM/JAVA deal appears to be off, NTAP is snapping back. At times, investors have wondered if Cisco Systems (CSCO) might become the acquirer of NTAP.
In any event, option investors are buying 84,000 NTAP call options today. This is a huge amount of contracts for a single day (eight-times usual volume) and it might suggest the rumors of takeover may be alive and well. With the stock trading at about $16.60, option buying has been concentrated in the NTAP April 17.50 (NULDW) and May 17.50 (NULEW) Calls.
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