NEW YORK (TheStreet) -- Shares of Cypress Semiconductor (CY) were falling 4.0% to $11.68 Friday after the chipmaker made its "best and final" offer to acquire Integrated Silicon Solution (ISSI), which failed to beat Chinese investment firm Uphill Investment's bid for the competitor chipmaker.
Cypress offered to buy Integrated Silicon for $22.60 a share with an additional fee of 10 cents a share added for every three months until the potential transaction gains regulatory approval, according to the Associated Press. The additional fee would start accruing on October 1 and increase to a maximum of 20 cents a share.
Integrated Silicon said that Cypress' offer was below Uphill Investment's offer of $23 a share. The company will hold a special shareholder meeting on June 29 to approve Uphill's acquisition offer.
The Integrated Silicon and Uphill deal is expected to close in the third quarter of 2015.
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, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. 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 0.7%. 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.
- CY's debt-to-equity ratio is very low at 0.18 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.48 is very weak and demonstrates a lack of ability to pay short-term obligations.
- 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