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Like Ships in the Night...
9:35 am

Like ships in the night, Starent (STAR) passes me by on its way to a clean double from where I wanted to buy it. If you don't know what I am talking about, Cisco (CSCO) is buying Starent for $35/share in cash.

Which raises the next question: Are the other players in the wireless backhaul space a Buy or a Sell? Is Cisco going to eat its lunch or make them bait for others?

Not sure to be honest. With the best in class gone, my attention now turns to Canadian outfit Dragonwave Inc. (DWI.CN) which will IPO in the US this week. This one is mighty expensive so it will have to pull in for me to bite (didn't I say that for Starent too?). Another one to watch in the space is Ceragon Networks (CRNT).


Of Akamai, Cisco, and Starent
12:45 pm

Akamai's (AKAM) calls are active today and the stock is up about $1. My guess is that the Cisco (CSCO) buy-out of Starent (STAR) is once again jazzin' the rumormill regarding Akamai.  If I had $1 for every time that's happened ...

What is far more intriguing about the Cisco-Starent tie-up is the EBITDA multiple Cisco paid:  north of 26 times T12M. Slap that number on Akamai and you get a price of $45/share. Am I dreaming? Almost certainly. But I don't think I'm too far off in suggesting that within different areas of the network, Akamai and Starent are actually similar companies, with very similar competitive bakdrops. 

Even without a buyout, the Cisco deal may have reset the valuation multiple higher for companies like Akamai.