Webex Bought by Cisco

by The Graham Investor on March 15, 2007

We added Webex Communications (WEBX, Quote, News) to the now-discontinued GI portfolio on 05/12/2005 at $22.87. Some background to the actual purchase can be found here.

Today, Webex was bought out by Cisco Systems (CSCO) for $3.2billion.

The news sent Webex’s stock soaring 22.03% to close at $56.38.

With a healthy 144% gain, WEBX will have to be our first sell since there’s likely to be little or no benefit in staying in past the eventual closure of the Cisco deal.
Once again, this demonstrates the value of looking for small to mid-cap stocks trading below intrinsic value that have plenty of cash (relatively speaking). More often than not they become buyout targets, because the cash can be used to partially fund the buyout.

{ 1 comment… read it below or add one }

Leave a Comment

Previous post:

Next post: