Broadcom Shakes Up Semiconductor Space with This Deal

Broadcom (NASDAQ:BRCM) is buying NetLogic Microsystems (NASDAQ:NETL) for 3.7 Billion dollars in cash. That is a premium of more than 50% over NETL’s closing price. The purchase takes NETL’s portfolio out of the hands of rivals like Qualcomm (NASDAQ:QCOM), Intel (NASDAQ:INTC), and Texas Instruments (NYSE:TXN). NETL shares currently trade at $48.12 that is up over 50.8%, while Broadcom shares trade at $33.06which is down more than 1.14%.

Broadcom currently sports a Price to Earnings (P/E) ratio of about 19 which is much higher than its peers. The company also trades at a sales multiple of 2.5 which is also higher than its industry rivals.

On the technical front shares trade well below their declining 50 and 200 day moving averages. The MACD shows a bearish crossover while RSI is pointing down at 45.