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Broadcom Tanks After $18.9 Billion CA Purchase Puzzles Market

Stock suffers biggest intraday drop ever; lowest in 18 months
Analysts struggle to see strategic or financial rationale

Broadcom is buying CA Technologies for $18.9 billion. Bloomberg’s Jason Kelly reports.Daybreak: Americas." (Source: Bloomberg)

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By Ian King

July 12, 2018 at 2:45 PM UTC

This article is for subscribers only.

Broadcom Inc. shares suffered their biggest drop ever Thursday after the company said it will buy software maker CA Technologies for $18.9 billion, a deal that flummoxed many analysts who failed to see its strategic or financial rationale.

“We are getting investor pushback with an unexpected surprise at a big software acquisition as it potentially strays from AVGO’s hardware focus,” Mizuho Securities analyst Vijay Rakesh wrote in a note.