Fusion-IO: Likely to be Taken Over?

Fusion-io

has been a popular takeover candidate in trading circles. The stock has seen some upward momentum as various large tech names have been purportedly interested in purchasing the company. However, should investors consider taking a position in the company with an expectation that it will be purchased for a premium at some later date? Benzinga contacted two analysts on the matter. The first analyst, William Blair's Jason Ader, saw the potential for the name to be bought out. Currently, he has an Outperform rating on the stock. He stated that the company was highly disruptive, and that its technology may be coveted by larger tech companies. The second analyst, who asked not to be named, was particularly bearish on the prospect of a buyout, and on the company in general. He stated that for the company to be purchased, it would require roughly $4 billion in capital, which would mean that the purchaser would have to be enormous, and even then it could create a lot of dilution. Further, he questioned why a company would want Fusion-io. He argued that if a company was purchasing it for the hardware, there were other companies in the space that would be a better deal. He doubted the company would be bought for its software, as he stated that it was not very innovative. At any rate, the company continues to be a hot topic for traders. Shares are currently up on the session, trading right near $28.