Market reaction was good for both Intel and McAfee

• One-day loss for Intel is 3.52%, one-day return for McAfee is 57.07%


• Considering the trend, the loss for Intel was rather low, indicating that market punishment was not as severe for acquisition of unrelated (software) business


• My speculation is that perhaps the market was expecting a deal from Intel, as signaled by high trading volume and declining stock price prior to the announcement


• The high return on MFE signals significant liquidity motivation to exit the company


• INTC listing NASDAQ might have reduced the loss while MFE listing on NYSE might have increased the gain


• My speculative view on strategy of the deal: apart from hardware security, Intel now has access to cloud security which can be used to offer complementary service to key cloud service providers i.e. Amazon, Salesforce… This strengthens Intel’s alliance beyond the long-standing one with Microsoft (which is currently lost in the cloud). Then what can would Intel do with an alliance? War against Apple?

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