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Trident Microsystems


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.

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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.

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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.


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