Resonant (RESN) faces probe after stock rallies 248% on Murata’s bid

Follow us on Google News:
 Resonant (RESN) faces probe after stock rallies 248% on Murata’s bid
Image source: Thapana Onphalai,shutterstock

Highlights

  • MurataElectronics North America, Inc., a wholly-owned subsidiary of Japan-based Murata Manufacturing Co., Ltd., is acquiring Resonant Inc. (NASDAQ: RESN).
  • It will pay a premium of 265.85% on the closing price of RESN stock on February 14. 
  • A law firm is currently reviewing the deal to ensure the best interest of RESN shareholders. 

The stocks of software company Resonant Inc. (NASDAQ: RESN) skyrocketed by over 248% on Tuesday morning after a subsidiary of Japan-based Murata Manufacturing Co., Ltd. offered to acquire the company at a premium of 265.9% on its last closing price. 

After the announcement, the RESN stock jumped 248.78% to US$4.29 at 11:13 am ET.  

According to the companies, both sides have entered into a definitive agreement for the purchase by Murata Electronics North America, Inc., a wholly-owned subsidiary of Japan-based Murata Manufacturing Co., Ltd. 

Murata Electronics will buy all the outstanding shares of Resonant (RESN) not owned by Murata for US$4.50 per share in an all-cash deal. It will pay a premium of 265.85% on the last closing price of RESN stock, which is US$1.23 on February 14. 

The deal will likely close in March, subject to customary closing conditions. After the transaction, Resonant will become the wholly-owned subsidiary of Murata. 

The acquisition will allow both companies to expand their business to new markets. 

The Austin, Texas-based Resonant has picked Stifel as its financial advisor and Centerview Partners LLC as its lead financial advisor. Mizuho Securities Co., Ltd. will act as an exclusive financial advisor for Murata.

Also Read: SEC fines BlockFi a record US$100-mn for violating registration rules 

Investigation into suspected price manipulation

Amid the positive news, a law firm has initiated an investigation into suspected price manipulation in the planned transaction. 

The Wohl & Fruchter LLP's law firm is probing the acquisition to ensure the transaction is in the best interest of RESN shareholders, Wohl & Fruchter said in a press statement. The probe is drawing attention because not all business deals are subjected to an inquiry by a law firm. 

The subject of the investigation is a suspected price manipulation by Resonant directors, and whether all the information about the transaction were fully disclosed, said the release.  

Also Read: On 20th anniversary, PayPal (PYPL) caps era of growth, sets new goals 

The deal needs shareholders' approval for closing the transaction, although the directors of both companies have already approved.   

Also Read: AMD finalizes US$50-billion Xilinx purchase in industry’s biggest deal

Also Read: From TWTR to U: Web3 stocks in focus after LeBron ad creates buzz

Resonant Financials

For the nine months ended September 30, 2021, the company booked a net loss of US$26.87 million or US$0.45 per share diluted, reflecting a 4.6% increase YoY in the per-share loss. 

Its revenue was US$1.65 million in the period against US$2.55 million in the same period in 2020. The accumulated deficit totaled US$177.8 million as of September 30, 2021.  

Its cash and cash equivalents were reduced to US$15.35 million as of September 30, 2021, from US$24.97 million as of December 31, 2020. 

Also Read: From UPS, RTX to HON: Top industrial stocks to explore in 2022

The Texas-based Resonant develops software and service platform to increase the efficiency in filters for radio frequency for mobile devices. The company went public in 2014, and its current market capitalization is US$282 million.

The stock fell 83% in one year at the closing price of US$1.23 on February 14, 2022.  

Bottomline

After the deal's announcement, Resonant's trading volume saw a massive jump in intraday trading. However, investors must apply due diligence before investing in the stock market.

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media LLC (Kalkine Media, we or us) and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures/music displayed/used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it, as necessary.

Featured Articles