Cypress Semiconductor (CY) Stock Declines Following Unsolicited Bid For Integrated Silicon

NEW YORK (TheStreet) -- Cypress Semiconductor (CY) shares are down 0.8% to $13.03 in afternoon trading on Friday after Integrated Silicon (ISSI) announced that it received an unsolicited bid from the chip maker to acquire Integrated Silicon's outstanding shares for $19.75 per share in cash.

Integrated Silicon has already accepted an offer from Uphill Investment for $19.25 per share, but the company said that Cypress' offer constitutes a superior proposal and it is therefore obligated to engage in talks with Cypress as part of its duty to shareholders.

Integrated Silicon shares are flat at $20.14 in trading today.

Integrated Silicon said that it is not "withholding, withdrawing, qualifying, amending or modifying its recommendation with respect to the Uphill Agreement and the merger with Uphill, is not proposing to do so, and is not making any recommendation with respect to the Cypress proposal."

TheStreet has further coverage of Cypress' bid here.

TheStreet Ratings team rates CYPRESS SEMICONDUCTOR CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate CYPRESS SEMICONDUCTOR CORP (CY) 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 revenue growth, solid stock price performance and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and weak operating cash flow."

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

  • The revenue growth came in higher than the industry average of 0.0%. Since the same quarter one year prior, revenues rose by 22.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, CY's share price has jumped by 33.57%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • CYPRESS SEMICONDUCTOR CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CYPRESS SEMICONDUCTOR CORP turned its bottom line around by earning $0.11 versus -$0.33 in the prior year. This year, the market expects an improvement in earnings ($0.30 versus $0.11).
  • Net operating cash flow has significantly decreased to $12.30 million or 51.19% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 2796.2% when compared to the same quarter one year ago, falling from -$7.93 million to -$229.79 million.
  • You can view the full analysis from the report here: CY Ratings Report

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