Stock Watch: PMCS, SNDK – Option Activity, Desk Chatter, and Analyst Activity

Mergers and Acquisitions are an integral aspect of the Capital Markets arena.  Though somewhat complicated to comprehend the bits and pieces of a particular deal, experienced traders monitor important elements of data leading up to the announcement or chatter of a particular deal.  Recently, market participants were provided repeated reminders why certain data points are important in the expectation of possible M & A activity.  The two most poignant examples in October are PMCS and SNDK.  On October 6 PMC Sierra announced that SWKS Skyworks Solutions has purchased the company for $2 Billion.  A significant amount of activity preceded this announcement tracing back to late September.  Keeping in mind that Option Call activity on the offer tends to point to a bullish sentiment,  we picked up a number of significant call option activity on Sept 26^th ,30^th, and Oct 2^nd. Additionally, a considerable amount of desk chatter was detected on Sept 30^th and Oct 1^st.  Subsequently, we saw positive analyst commentary in pre market activity on Oct. 2^nd.

SNDK, with somewhat different dynamics, also exhibited interesting activity preceding the Oct 14 talk of a possible acquisition.  Possible acquisition involving SNDK were detected on Oct.8^th in pre market activity.  On Oct 9^th and 13^th, Call Option activity was observes.

Though certainly not indicative of any definitive M & A activity, experienced professional traders and investors monitor a number of data points and pieces of information including options activity, desk chatter, and analyst commentary.

We continue to monitor numerous data points to assist traders and investors in understanding market dynamics.