Informix' moribund share price was jump started to become the most actively traded hi-tech stock on Thursday, as Wall Street bought into rumours that a takeover of the beleaguered database company is now almost inevitable.
The rumours sent Informix stock price up 23 per cent on Thursday to hit 11 3/8. The supplier has been subject to speculation about a possible takeover since it reported a $140 million loss for its first quarter. Chief executive Phil White has already confirmed that the company is unlikely to return to profitability before the end of the current financial year.
In recent days the Silicon Valley and Wall Street rumour mills have moved from debating whether it will happen to arguing over who the buyer will be, with Microsoft, IBM, Netscape and Computer Associates in the frame.
A potential Microsoft bid was the most popular speculation on the hi-tech investors bulletin boards on Thursday with one particularly strong rumour suggesting that Informix had declined a $12 a share offer already. But some investors were less certain arguing that while Informix would provide the PC supplier with a much needed enterprise-class database, Informix strengths lie in Unix, not NT. Others though that Microsoft might be interested in acquiring the object-relational technology of Illustra, acquired by Infomrix last year At least one industry watcher thought there would be easier ways of achieving this. ?If Microsoft wants Illustra technology, just recruit [Informix chief technology officer Michael] Stonebraker?s team with huge multi-million dollar packages,? he said. ?Why buy out the company when you can cripple it while grabbing their brainpower?? Netscape was thought likely to benefit from buying Informix by giving the company a database system which it could more tighly integrate with its products, but IBM - which has a competitive offering to Informix? Universal Server - was not seen as a serious contendor. ?I don?t see much of a gain for IBM other than the elimination of a competitor,? said one Wall Street investor. But not everyone was buying the takeover talk. ?It?s not likely that any company wants to buy Informix at the moment,? said one hi-tech stock watcher. ?With laws suits and accounting problems, the liability of the lawsuits and the rela income from operations not clear right now, it is difficult to evaluate what this company is really worth right now.? Perhaps the most bizaare speculation was fuelled by a separate suggestion on the Dow Jones wire that Oracle was set to announce an acquisition of 'major significance'. ?It would be just like Larry Ellison to trash [Informix} Universal Server, then go out and buy the technology!? said one Silicon Valley cynic. - Informix is undertaking an internal reorganisation to place more emphasis on its third party channels in an attempt to get back on financial track. The channel has become increasingly disillusioned since the database supplier decided to build up and emphasise its direct sales force three years to try and make itself more credible in large corporate accounts. The firm also plans to announce a raft of service initiatives in the next couple of weeks to make it easier for the channel to do business with it.
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