Conexant (CNXT)

Company. Conexant is "a worldwide leader in semiconductor solutions for broadband communications, enterprise networks and the digital home. Conexant's merger with GlobespanVirata in February 2004 created an industry powerhouse that enables the seamless delivery of broadband information between public access networks and the homes and businesses they serve." (company website)

Buy. I acquired shares of Conexant when it acquired GlobespanVirata in an all-stock deal of 1.198 shares of CNXT for each share of GSPN.

I originally bought GSPN in June 2003 while it was rising by leaps and bounds, apparently capable of no wrong. Then shortly after I bought it, GSPN announced that it would acquire another company in a deal that the market did not like. GSPN stock plummeted. Then GSPN announced that it would miss its earnings Expectations. GSPN stock plummeted some more. In a matter of days, the value of my investment had been more than halved. Ouch!

Eventually, GSPN gave up the ill-fated merger proposal and the stock price began to recover. I decided to hang on to see what would happen.

Then Conexant announced that it would acquire GSPN. Since CNXT was trending up, it only made sense to go along for the ride. The CNXT/GSPN merger became final on 1-Mar-04.

Sell. Conexant is making new 52-week highs, but I decided to sell anyway. At the current CNXT price, I can recoup my original investment in GSPN and eke out a small (1%) profit besides.

I am happy to get out of this one with my shirt intact. Besides, I have another whole lot of CNXT shares still in my portfolio on which there is a very handsome gain. As long as CNXT continues to rise, I'm along for the ride.