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TheStreet Open House

Mindspeed (MSPD) Soars, Suntech (STP) Skids

NEW YORK (TheStreet) -- Microcap Mindspeed Technologies (MSPD) exploded 68.4% to $5 after closing its fiscal year on a high, while Suntech Power (STP) looks worse for wear, plunging 16% to $1.26.

The former, a semiconductor maker, has agreed to be acquired by M/A-COM Technology Solutions (MTSI) for $5.05 a share, a 70% premium on Tuesday's close of $2.97.

"The company shares our commitment to innovation, and the two companies complement each other well, particularly within the high-performance analog market segment," said Mindspeed CEO Raouf Halim in a statement. "We will have the scale and resources to deliver innovative technologies to our customers and drive growth, with a larger portfolio of products and a global sales force."

The Newport Beach, Calif.-based company also said it is in "advanced discussions with a strategic acquirer" of Mindspeed's wireless business. Any potential sale would be separate from the M/A-COM transaction.

The company also reported fourth-quarter earnings of 2 cents a share, 4 cents higher than analysts surveyed by Thomson Reuters had expected. Revenue of $36.04 million was largely in line with forecasts.

Suntech Power, meanwhile, plummeted 16% to $1.26 as its future looks increasingly uncertain. The Chinese supplier of renewable energy equipment filed for provisional liquidation in the Cayman Islands, where it is incorporated. Should the courts grant clemency, the company will undertake a restructuring to return to profitability. Suntech is currently considering a Chapter 15 filing stateside.

On Monday, Suntech announced it was selling its main China assets to Hong Kong-listed Shunfeng Photovoltaic for around $492 million. Wuxi Suntech Power, one of the units purchased, was declared insolvent earlier this year.

In October, U.S. bondholders filed a petition with a New York court to pressure the company into involuntary bankruptcy due to its $2.3 billion in debt.

TheStreet Ratings team rates MINDSPEED TECHNOLOGIES INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about its recommendation:

"We rate MINDSPEED TECHNOLOGIES INC (MSPD) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, generally disappointing historical performance in the stock itself and generally high debt management risk."

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