Options Traders Spark Marvell Interest (MRVL)

Marvell Technology Group Ltd. (NASDAQ: MRVL) was the subject of a lot of buzz today.  There wasn’t any news out on it, but there were enough options that traded today that would account for almost 5 million shares on a leveraged basis.

We asked around after several inquiries came in throughout the day, and most of the inquiries seemed to revolve around the options trading rather than anything steadfast that sounded like there was an an imminent development.  One source noted to me some "chatter" that Tokyo Electron was the name he heard that may have an interest.  The truth is that there will be know way to know if Marvell is really in play or not without knowing everything management is doing currently.  Because of it being perceived as near-fabless model, that also narrows the field.

34,933 contracts traded for the March-2008 $10 Calls, and the open interest was merely 2,188 contracts.  In the March $12.50 Calls, there were 12,517 contracts that traded hands but the open interest on that was already 30,931 contracts.

Earnings are scheduled for March 6, 2008, so it is too early for traders to start playing this in hopes that there is some earnings blowout coming.  Shares briefly traded under $10.00 recently, but they have also been cut in half over the last year.  To make things worse, shares are down from over $30.00 just two years ago.

Shares rose almost 5% today to $10.99 on above average trading volume.  On last look shares were up about another 2% to $11.23 and had traded some 300,000 shares in after-hours activity.

Jon C. Ogg
February 20, 2008