Investors React to Broadcom’s Decision to Walk Away from the Deal

Broadcom had plans to acquire Symantec, but the deal fell through as Broadcom announced that the negotiations had ended. CNBC reported that the main issue was Symantec’s asking price of $28 per share, which was 26% higher than the stock price prior to the acquisition talks. Consequently, Broadcom chose to terminate discussions, leading to no agreement between the two companies.

Despite Broadcom’s initial interest in acquiring Symantec, the decision to back out of the deal is viewed positively by many investors. This move is seen as a display of strength on Broadcom’s part. Following the news, Broadcom’s stock price increased by 1.38% to reach $289.31 per share. While rejecting an acquisition due to pricing could be seen as a weakness, for a significant entity like Broadcom, it signifies financial prudence more than anything else. Symantec, being a pricey software firm, took a gamble, but the outcome favored Broadcom in the end.

Although this failed deal does not rule out the possibility of Broadcom acquiring another company, the company is actively seeking other software firms for potential purchases. According to The Street, Tibco, a small private enterprise software company, is believed to be Broadcom’s next likely target.