by Houghton and Atkeson 07/02/08
Options in Zoran (ZRAN) are trading 10 times their usual volume and 50% of total open interest on rumors that NVIDIA (NVDA) is making a run for the company.
Specifically, investors have traded nearly 8,000 ZRAN July 12.50 Calls (ZUOGV) and 3,000 ZRAN Aug 12.50 Calls (ZUOHV). With Zoran's earnings not expected until July 23, the July call buyers are indicating that something may happen soon.
ZRAN sells chips taht go into Digital TVs, DVDs, digitital cameras, printers and handsets. The exciting part of its product lineup is the digital converter boxes that will help old CRT TVs accept digital broadcasting. The Fedaral Communciations Commission has mandated the U.S. transition to digital TV by February 2009.
Zoran has $7 cash per share, and $9 of tangible book. The company also has a $100 million buyback program in place.
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