Why Marvell Technology (MRVL) Spiked More Than 8%

NEW YORK (TheStreet) -- Marvell Technology (MRVL) spiked 8.5% to $13.03 on Tuesday as investors bought up stock on rumors KRR & Co (KKR) had acquired a 5% stake in the semiconductor developer. Bloomberg reports the investment firm allegedly purchased its position for around $296 million based on Marvell's $5.9 billion market cap as of Monday and could be considering a leveraged buyout.

CEO Sehat Sutardja and his brother Pantas Sutardja, the company's CTO, currently hold 20% ownership, while hedge fund Greenlight Capital owns 9%.

Shares of KKR & Co moved slightly higher, up 0.57% to $23. A spokesperson for KKR declined to speak on the speculation.

At the time of publication, Marvell has not responded to requests for comment. 

TheStreet Ratings team rates Marvell a Hold with a ratings score of C+. The team has this to say about its recommendation:

"We rate Marvell Technology Group Ltd (MRVL) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

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