Wedbush Comments On Informatica Rumor: Plans To Sell Company Are 'Nonexistent'

Informatica Corporation (NASDAQ: INFA) has been tearing higher, propelled by rumors that Elliott Associates (an activist hedge fund) is pushing for a sale. Shares were trading at $38 mid-day Monday and prices closed Tuesday at $43.

Analysts at Wedbush said Wednesday that plans to sell the company are “nonexistent.” Wedbush reiterated a Neutral rating and raised its price target to $42 from $37.

Wedbush said management’s plans to invest in growth are counter to the path a company would take to cut costs ahead of a private-equity sale. Further, Informatica's management has a good reputation, allowing them room to make improvements without activist pressure. As the speculation cools, Wedbush sees the take-out premium falling.

However, the analysts note that in the near-term, shares “won’t be driven by fundamentals,” but instead by speculation on whether Elliott will be successful.

Shares of Informatica were ticking a bit lower in Wednesday's premarket.

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