Stock Watch: Digital Island Soars on Sandpiper Acquisition

When acquisitions are announced, it is pretty rare to see a big climb in the stock price of the company doing the purchasing. This is exactly what happened on Monday when Digital Island (Nasdaq: ISLD), a company that offers network services for online businesses, announced that it would purchase content delivery company Sandpiper Networks.

When the deal was announced, it was worth about $630.5 million in stock. Then, however, shares of Digital Island gained more that 68 percent, closing up 15-11/16 to 38-11/16. At that stock price, the deal is worth more than $1 billion. One reason investors like this deal is because of the positive buzz surrounding content delivery companies right now. The initial public offering of content delivery company Akamai Technologies is expected to have an extremely strong opening later this week.

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