I'll preface with saying this is obviously not a great investing strategy. But it can be fun for those of us who allocate some money to play around in the market.
Maybe it's hindsight bias, but I can't help but think I should have seen this deal coming. Taking away $10 million insider-trading guy, there was a nugget of public informaton out there that suggested this deal:
Back in February 2022 (Feb 11 to be exact), WSJ reported Cisco making a $20B takeover offer of Splunk, despite not being in talks. Obviously, Cisco saw something in Splunk. And if we all did our DD, we would have seen it too.
I'm feeling a bit compelled to write this, even just for my own mental processing, because this isn't the first time we've seen an acquisition come without warning. The last notable example was MSFT/ATVI. There was so much pomp and circumstance surrounding that deal before it finally went through that you couldn't have ignored it if you tried.
And the thing is, EV on all these companies is publicly available. So you can get a pretty accurate estimate of what share price a company would go for, and plan accordingly after doing some DD.
Yes, hindsight is 20/20. But I think there are lessons to take from this, mainly pay attention. If you see talks of a takeover, or an attempted takeover, consider it. Because it might come up again, and it might be a good opportunity if it does.
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