MRV Communications Wins on Buyout and IPO Strategy

MRV Communications (MRVC-NASDAQ) is trading up 9% pre-market around $4.15 on more than 400,000 shares.  The company made two key announcements.  They are paying $131 million in cash and stock to acquire Fiberxon and rolling it into the Luminent unit, and then they are taking Luminent public.  If you will recall way back when, Luminent used to be its own public company and was deemed a lagging fiber optic cable play in the field.  So this is going to be its second time to go to the dance.

MRVC had a market cap of $479 million before today and the stock closed yesterday at $3.83.  Its 52-week trading range is $2.00 to $4.71, but if you go way back to when it acquired Luminent this used to be a $100 stock during the midst of the bubble, but $5.00 has been the peak over the last 5 years and in 2002 it had briefly traded under $1.00.

Did Cramer really know these guys were going to spin-off Luminent?  He noted earlier this month its huge unlocking value that could come if they spun this off.  Did the company think about what he said and decide to listen to him?  That very well may be the case.  No bankers have yet been hired and the company sure sounds like this will come in later 2007 or even 2008.  It sounds more like the company listened to Cramer for a free strategy session.

Jon C. Ogg