There's an intriguing post on Seeking Alpha suggesting that Cisco buy gigabit Wi-Fi company Ubiquiti Networks and groom its CEO, Robert Pera, to be Cisco's next CEO. The author cites the stock performance of Ubiquti in 2013 - the fifth best performing stock that year - as well as that of CEO Pera : "perhaps the strongest of any company on Wall Street in 2013."
The author acknowledges, however, that he is a Ubiquiti stockholder so any acquisition at a premium on Ubiquiti stock will benefit him. But he also listed some "misgivings" concerning a possible Cisco acquisition.
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He claims Ubiquiti is out-innovating Cisco and that its Wi-Fi products will soon outgrow Cisco's in volume sales. The company is lean, efficient and has a business model the envy of the wireless LAN industry and cutting edge customer service, the author claims. He doesn't co me right out and say so but, he seems to be intimating that Cisco would bog down Ubiquiti's growth, innovation and differentiation.
Finally, he proposes that Cisco's $8 billion bond sale this week wouldn't be enough for Ubiquiti, valuing the company at $91 per share: he proposes a $120 per share offer for the company, or $10.6 billion. He likens the the value Cisco would receive to Facebook's $19 billion binge last week on WhatsApp:
a $120 per share offer would seem fair and would provide Cisco with a young, sage and hungry leader that would give them what Facebook gained when purchasing What'sApp for 19 billion dollars: An assurance to Cisco stakeholders that the company is seeing around the corner and is positioning itself with the tools necessary to continue being a dominant force in its industry.
Is Ubiquiti too good for Cisco to pass up at $10 billion? Or do you think a Ubiquiti shareholder is just pumping the stock?
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