ON Semi Can’t Explain Jump in Stock Price, Volume and Neither Can I. Got Any Theories?

ON Semiconductor (ONNN) shares have jumped more than 10% today on unusually high volume, and I’m sure someone can explain it. But I can’t. And neither can the company: in an interview, a spokesman said there was nothing going on that the company knows about that can explain the frenzied trading.

The stock actually started perking up in the last few hours of trading yesterday; by Wednesday’s close, the stock was up 27 cents to $6.80, on volume of 16.5 million shares; in a quick check, I couldn’t find another day with higher volume. (I looked back a couple of years, and found only a few days with volume north of 10 million shares.) Today the stock is up 71 cents, to $7.50, it’s highest level since February, on more than 25 million shares.

There are a couple of potential contributing factors, though it isn’t clear to me how they figure into the current picture.

Last week, the company said it is seeking some looser convenants on its senior secured credit facility so that it can “replace a significant portion of its bank debt with indebtedness to be incurred outside of the facility, to incur additional junior indebtedness and to permit the expenditure of up to $300 million to repurchase shares of common stock.”

The company also said its board authorized the repurchase of up to 50 million shares.

Ross Ayotte, director of marketing communications, said the company had not yet started buying back any shares. Ayotte says he didn’t know whether the request for looser debt covenants had been granted.

Meanwhile, Texas Pacific Group, the company’s largest shareholder, continues to gradually pare back its stake. In a Form 4 filing with the SEC yesterday, TPG said it sold a little over 1.8 million shares on Monday and Tuesday, reducing its stake to 112.5 million shares, or just under 35% of the company’s outstanding shares.

Craig Berger, an analyst with Wedbush Morgan, said in an interview today that he thinks ON shares could see improved performance once Texas Pacific gets its stake down to about 20% of the outstanding shares, and the market views them as less of an overhang for the stock. (He notes that shares of both MEMC Electronic Materials (WFR) and Seagate (STX) both showed marked improvement as Texas Pacific reduced its stakes in those companies down to about 20%.)

If you have any other theories on what’s going on with ON, I’d like to hear them.