The price tag seems to worry investors, who sent Brocade's shares down $1.83 (22%) to $6.50 by late afternoon.
At issue is the fact that Brocade is paying about $19.25 per share for Foundry, 41 percent more than Foundry was worth last night. Foundry shares were up $4.42 (32%) at $18.08 late today.
"I've heard there was no other bidder for Foundry. It's clear that Brocade wanted to buy Foundry," Wilson says.
Other evidence: Brocade passed up less expensive Ethernet options like Force10 Networks Inc. and Woven Systems Inc.
"If all they wanted was an Ethernet switch, there's plenty of companies they could have bought. They didn't want that. They wanted big, too," Wilson says.
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