Cisco Systems, Inc. (NASDAQ:CSCO) Comes Up With Acquisition News

tags: CSCO

We all know that Britain is leaving the European Union and we all know that this is worrying investors. Not surprisingly, tech stocks were affected by the referendum’s results and Cisco Systems, Inc. (NASDAQ:CSCO) was among the biggest losers.

On June 24, hours after it was confirmed that the UK is breaking up with the EU, Cisco tumbled to a close of $27.75 per share (a loss of about 5%). On Monday, it slid some more and it stopped at $27.31 per share.

Yesterday, the market was a bit more positive. CSCO managed to bounce and after gaining around 0.5%, it closed the session at $27.79 per share. Today, it seems to be even more determined to go up. CSCO opened the session with a gap up and about fifteen minutes into it, it’s traded at around $28 per share.

There are two reasons for yesterday’s bounce and today’s positive movement. The first one lies with the fact that, overall, the markets seem to be recovering from the whole Brexit panic and most of the stocks are moving up.

The second one is an upcoming acquisition which was announced about an hour and a half before yesterday’s opening bell. Cisco said that in an attempt to expand their security portfolio, they will be acquiring a private company called CloudLock.

Certain contributors seem to be particularly bullish on the $239 million deal which is expected to close during the first quarter of CSCO‘s fiscal 2017. They reckon that it comes at precisely the right time and that with CloudLock’s help, the internet infrastructure giant will stay in line with the current trends.

There’s no denying the fact that the timing of CloudLock’s acquisition is all but perfect considering the Brexit fears. Whether it will really be as positive for the company as some people reckon, however, is for time to tell.