Rumor Mill Moves Back To Brocade (BRCD, DELL, HPQ, IBM, CVLT, CSCO)

Brocade Communications Systems, Inc. (NASDAQ: BRCD) is running higher on buyout speculation.  The move is only about 18 months too late if it is even true.  Reuters reported that Brocade has hired Frank Quattrone’s outfit called Qatalyst Partners in November to explore alternatives and that it has several first rounds of interest.  The report is of course one of the “people familiar with the situation” and these have a very spotty history between rumor and truth.

If Brocade is in play, investors may want to consider that CommVault Systems, Inc. (NASDAQ: CVLT) might be another candidate.  As far as who the buyers would be or could be, Hewlett-Packard Co. (NYSE: HPQ) and Dell Inc. (NASDAQ: DELL) were two such names speculated in the past.  Perhaps International Business Machines Corporation (NYSE: IBM) could be another.

The aim and value is that Brocade is often “The Poor Man’s Version” of Cisco Systems, Inc. (NASDAQ: CSCO).  With Cisco now going after the data center revenue segment, many of these and other technology outfits could be buyers.

For now, just count this as a rumor.  Brocade shares hit the 10% limit halt for a circuit breaker and shares are currently up 8.7% at $5.89. CommVault shares are up 1.2% at $45.97 on the day.

JON C. OGG