Sifting through the rumor mill at Rackable…
Since mid-May, rumors have been circulating that Rackable Systems (RACK) is about to be bought by Dell (DELL). While Rackable has denied the rumors, it’s also been busy updating various agreements with top executives, including this amended agreement for CFO Madhu Ranganathan filed late on Tuesday.
That’s in addition to several other agreements that have caught my eye over the past few months. In the interest of full disclosure, I bought a small stake back in May based on my reading of some of those earlier filings and am up about 15%. Footnoted regulars know that it’s something of a sport for me to hunt for pre-merger targets based on language disclosed in their public filings. Of course, whether the most recent agreement is just simple adminstrative mumbo-jumbo, or a sign of a pending deal, remains to be seen.
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September 27th, 2007 at 10:41 pm
I would be very very cautious reaching those kind of conclusions regarding amended agreement. For example, Gannett and CSK Auto have very similiar “change in control” additions like those of Rackable. This all occur in the last 9 months, and both stocks are down SHARPLY.
Moreover, RACK introduced a new CEO in April.. I would find it highly unlikely for a company to pick a new CEO than sell themselves five months later…. just my two cent
September 28th, 2007 at 10:02 am
Thanks for the words of caution. As I say ad nauseum, reading SEC filings is more of an art than a science. The mere fact that a company files a new agreement often means little, until it’s put into context with other data points and various pieces of other filings.