Ambarella (AMBA )’s actions won almost 20% on Tuesday following a report according to which the flea designer based on Santa Clara explores a potential sale.
According to sources that have spoken with BloombergAmbarella is already working with bankers and has also attracted the interests of redemption of investment capital companies.
Taking up Amba is an exciting proposal for the giants of semiconductors interested in strengthening their footprint in the automotive space, added the report.
Including yesterday’s rally, Ambarella action is up more than 60% compared to its bottom of the year in April.
Ambarella exploration of a potential sale can be positive for its shareholders, because buyouts are often contained in an important premium.
In addition, a significant increase in Amba shares after the Bloomberg The report already reflects market confidence in the strategic value of the company, in particular in Edge imaging and automotive imagery.
Thus, a buyout agreement could unlock greater value for shareholders that Ambarella could independently achieve.
Consequently, even in the midst of its recent losses, the prospect of a competitive tender process could inject momentum into the story of Ambarella and help its rally in stock in the weeks and months to come.
Investors could also take heart in the fact that Richard Shannon – a Craig -Hallum analyst – expects Ambarella action to be well even without potential sale.
Earlier this month, Shannon reiterated his note “Buy” on AMBA shares which, according to him, could reach $ 95 in the next 12 months, indicating an additional 60% potential of the current levels.
In his research note, the analyst awarded his optimism on the semiconductor stock mainly to the results of the first quarter of the company which easily exceeded the street estimates for the upper lines and the results.
Despite the weakness of the beginning of the year in Ambarella actions, Wall Street, as a whole, remains reasonably optimistic in the company listed at Nasdaq.
The AMBA action consensus rating is currently in “moderate Buy” with the average target of around $ 80, to a potential advantage of more than 30% of here.
