Wednesday, August 23, 2006

Hit #108

Loudeye (LOUD) was acquired some 2 weeks ago by Nokia for $200 million in cash, valuing Loudeye shares at $4.5, a whopping 170% premium over the previous close, but still a huge discount of 70% to my average pre-reverse-split cost of around $11/share!

Being one of my largest individual holdings, I have followed this closely and learnt a lot of lessons while doing so.

The high price paid indicates that there were other potential suitors, most likely Microsoft and/or Openwave Systems.

Nokia is making another smart move, preparing itself for an era where cell-phones become the one and only device to own! I have owned Nokia shares ever since they came out with disappointing news a few months ago that battered the shares. Though shares have since risen around 80%, this is a good long-term hold that I don't intend to sell. The dividend yield is attractive, and is likely to go higher.

With its recent sharp pullback, Openwave may now become a target for Nokia or a Japanese buyer.

Previous hit - Watchguard (#107)


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