Darspal S Mann
Long/short equity, growth at reasonable price, special situations, deep value

Acquisition Thesis Is Falling Flat And Gigamon Stock May Follow Suit

Gigamon Inc. (NYSE:GIMO) has recently filed for a secondary offering after going public in June. Looking at the strong stock performance, it should not surprise anyone that the company is moving aggressively to monetize the recent stock performance. It is better for investors to side with caution and move with the company to monetize the recent gains as the tide of concerns arise.

Bullish investors are betting that

  1. The company is a good acquisition target
  2. The company is leading the network monitoring switch market with limited competition
  3. Earnings leverage will follow the revenue growth

Much of the "bull-side" thesis is falling flat after the strong performance by Ixia (NASDAQ:XXIA) and NetScout (NASDAQ:NTCT). Gigamon is...

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