AMD's stock rose today on speculation that the chip maker might be acquired by IBM. We've heard this rumour before in the past and analysts claim the chances of a takeover are slim.
"The takeover of AMD by IBM has been mentioned before and with AMD shares being so low, it might be a good time for IBM to acquire them," said William Lefkowitz, options strategist at brokerage firm vFinance Investments in New York.
AMD call options were trading higher than usual because of the rumor, he added.
IBM of Armonk, New York, has had a research and development expense-sharing agreement with AMD, and analysts have speculated that AMD might want to use IBM's East Fishkill, New York, chip-fabrication plant to build microprocessors.
An acquisition of AMD would be "a pretty low-probability event because IBM is moving away from hardware and manufacturing and moving to software and solutions," said Ashok Kumar, an analyst at CRT Capital Group. "I don't think IBM wants the bragging rights to go up against Intel."