MIPS Takes Out New High on Continued Buyout Hope

MIPS Technologies Inc. (NASDAQ: MIPS) has been on a major run of late, and shares hit a new 52-week high this morning. We have seen four consecutive days of gains, as this closed at $6.37 back on August 30 and now shares are up at $7.41. This move is based on the hope of a buyout, and the trading volume has been more than 1 million shares per day for each of the past four trading days. The average volume is usually about 700,000 shares or so.

Bloomberg reported back in April that the struggling processor design firm had hired Goldman Sachs Group Inc. (NYSE: GS) to find a buyer. Just this week an article at Seeking Alpha updated that situation.

Now this morning as of 10:17 a,m. EST, we have seen a whopping 3,016 contracts trade in the September $8.00 call options trade hands. The open interest was only 1,042 contracts, and the 360,000 shares traded so far today makes the options volume on a fully leveraged basis nearly the same as the stock volume.

The market cap for MIPS is only $393 million, but it still trades at close to four-times its book value. The company also has no debt.

JON C. OGG