SANTA CLARA, Calif. (

TheStreet

) --

Trident Microsystems

(TRID)

was trading higher on above-average volume after the company it will acquire the television and set-top box systems business of

NXP Semiconductors

.

Under the terms of the transaction, NXP will receive newly issued shares of Trident common stock equal to 60% of the total shares outstanding post-closing, including approximately 6.7 million shares that NXP will purchase at a price of $4.50 per share, resulting in cash proceeds to Trident of $30 million.

In a separate release, Trident revised its revenue forecast for the fiscal first quarter higher to $31 million from its prior guidance range of $22 million to $25 million. Trident also said it expects to report an adjusted operating loss approximately $10 million, compared with earlier guidance for a loss of $12 million to $14 million. Trident will report fiscal first-quarter results in the last week of October.

(Scroll down to comment on this story)

Trident shares were rallying sharply higher on big volume. The stock was lately rising 15 cents, or 6.4%, to $2.48. Earlier in the session, the stock touched an intraday high of $2.65.

More than 1.7 million shares changed hands in the first two hours of trading Monday, compared to the stock's 50-day average daily volume of 1.3 million, according to the Nasdaq. Trident has a 63.7 million-share float with a short interest float of 1.8% as of Sept. 10, according to Yahoo! Finance. More than 10% of the company's shares are held by insiders with another 60% owned by institutions.

==>MORE HIGH-VOLUME ACTION: AVI BioPhrma

Some investors posted on Internet message boards questioning why NXP Semiconductors would purchase Trident shares at the above-market price of $4.50 a share, especially since the stock was only trading at $2.48 Monday. Others argued that the deal with NXP could be a turning point for the company and should result in a ramp up in earnings.

Read more about today's high-volume stocks like AVI BioPharma in earlier "Pump Up the Volume" posts

.

-- Written by Robert Holmes in New York

.