NEW YORK (TheStreet) -- Shares of Cypress Semiconductor (CY) were falling 4.9% to $12.73 Monday after the company failed to reach a merger agreement with Integrated Silicon Solution (ISSI) as a result of potential antitrust concerns.
Shares of Integrated Silicon Solution were falling 1.6% to $20.40.
Cypress didn't meet its own deadline to complete the agreement, though Integrated Silicon Solutions is still open to close the deal, according to the Wall Street Journal. Cypress raised its offer to acquire Integrated Silicon to $643 million in May to outbid Summitview Capital.
If the deal was completed the combined company would be the largest supplier of SRAM for the global auto industry, Integrated Silicon Solutions said when Cypress raised its bid. The company said the deal would likely not receive approval without divestment of some of all of its SRAM business.
Integrated Silicon Solutions said it is "disappointed that Cypress is not willing to agree to take all necessary actions to ensure receipt of antitrust clearance."
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 largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income 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 0.6%. 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 28.09%, 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).
- 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 3010.6% when compared to the same quarter one year ago, falling from -$7.93 million to -$246.80 million.
- Net operating cash flow has significantly decreased to $12.29 million or 51.20% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: CY Ratings Report