This article will examine 20 takeover rumors that have prompted hedge funds to buy stocks.
Hedge funds tend to pile up on a stock that gains or is expected to gain positive attention in a market. And what more could ignite such a frenzy of activity other than whispers of potential takeovers? When combined with subtle market signals and insider movements, these rumors can cause investors to purchase the stock. Income-seeking investors usually keep a close eye on such signs and movements to capitalize on emerging opportunities.
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In particular, hedge fund managers, using their vast resources and analytical capabilities, are more receptive to such speculative cues and act upon them. Since investors and the rest of the market tend to generate income by closely following their actions, hedge funds hold influential power in market trajectories.
The allure of these rumors lies in their potential to generate substantial returns to shareholders. Those companies that become the target of a takeover or are perceived as a target experience a stock value surge in the market, thus attracting further investor interest. To stay ahead of the curve, hedge funds conduct thorough analyses, including financial statement evaluations, industry trend monitoring, and management behavior assessments, to predict the possibility of such events. Such a proactive approach, in addition to giving them an edge over other investors in the market, also contributes to the evolving nature of financial markets.
What prompts the takeover rumors? Loads of factors. In the current environment, as we all know, the new tariff rates and trade wars are the biggest and most significant catalysts for takeover rumors. However, hedge funds also take note of other factors when anticipating a takeover. For instance, the Federal Reserve cut interest rates. After a series of cuts that started in September, the Fed has paused the interest rate adjustments and maintained them between 4.25% and 4.50% since December 2024. The range is not historically low, compared to the near 0% interest rates the Fed announced amid the COVID-19 pandemic. However, larger companies may find it easier and less expensive to fund an acquisition or merger at the current interest levels.
On the other hand, the broader market sentiment could also play a vital role in takeover rumors. The expected takeover might get rescheduled or withdrawn, depending on the favorability of the market sentiment. For instance, the recent falls in the stock market might reflect negatively on the market sentiment, discouraging companies from risking an acquisition or takeover.
Meanwhile, with their keen insights, hedge funds attempt to identify undervalued assets and potential takeover candidates. In addition to reflecting confidence in market resilience, their actions signify the importance of timely and informed decision-making.
In this article, we delve into 20 takeover rumors that have captured the attention of hedge funds. Stay with us as we count them down from 20 to 1.
A man in long sleeves looking at stock market data. Photo by Tima Miroshnichenko on Pexels
Our Methodology:
We have put together our list by following a specific and straightforward methodology. Primarily, we have identified stocks with takeover rumors that have started or advanced in the past year. All the data used in this regard was taken from financial news, databases, and analyst reports, with all information updated as of April 21, 2025. This criterion is in place to ensure the relevance of the rumor with the hedge fund holdings for a stock. We have also collected information on the hedge fund holdings as of April 21, 2025, from the Insider Monkey database of Q4 2024. Based on this data, we have ranked our picks from 20 to 1, with 20 being the stock with the least number of hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
20. Silence Therapeutics plc (NASDAQ:SLN)
No. of Hedge Funds: 18
Silence Therapeutics plc (NASDAQ:SLN) is a London-based biotechnology company specializing in RNA interference (RNAi) therapeutics. The company develops precision medicines by selectively silencing disease-related genes using its proprietary mRNAi GOLD™ platform. The company focuses on treating conditions such as cardiovascular and rare hematological diseases. Silence Therapeutics plc (NASDAQ:SLN) differentiates itself from its industry peers through its liver-targeted delivery system and clinical pipeline expansion. Standing at the forefront of RNA-based innovation, the company collaborates with major pharmaceuticals to increase its translational potential.
Silence Therapeutics plc (NASDAQ:SLN)’s RNA drugs have been attracting the attention of bigger drug companies, including AstraZeneca, Mallinckrodt, and Hansoh Pharmaceutical. Their technological resources, which were highlighted during the collaboration agreements with these companies, as well as their siRNA and mRNAi drugs for heart and blood diseases, make them a potential target as of February 2025. The drug trials are ongoing, and positive results could increase the interest of the big companies involved in the company’s takeover. Though similar merger talks reported resulted in the suspension of shares from trading, analysts see a lot of potential in the possibility of a future takeover.
Insider Monkey database noted 11 hedge funds holding stakes in Silence Therapeutics plc (NASDAQ:SLN), indicating a comparatively low institutional interest and suggesting a similar level of expectations from the takeover rumor surrounding the company.
19. Plug Power Inc. (NASDAQ:PLUG)
No. of Hedge Funds: 24
Headquartered in New York, the pioneer in hydrogen fuel cell technology, Plug Power Inc. (NASDAQ:PLUG) provides turnkey solutions for e-mobility and stationary power applications. Their portfolio comprises fuel cells, electrolyzers, and green hydrogen infrastructure. The company targets logistics, material handling, and transportation sectors with these offerings. Plug Power Inc. (NASDAQ:PLUG) leverages strategic partnerships with firms like Amazon and Walmart to overcome the challenges of market competitors. The company’s focus on energy storage parallels the increasing adoption of clean energy globally.
Plug Power Inc. (NASDAQ:PLUG) has been volatile in recent quarters due to many industry challenges. Concerns have been raised regarding the potential delisting of the company from NASDAQ if the price stays below $1 for 30 consecutive business days. To overcome these challenges, the company has raised capital through stock offerings. The most recent activity involves a $280 million offering in March 2025. However, some analysts are still maintaining a Buy rating for the stock, primarily citing the horizontal or vertical takeover of the company because of its focus on material handling and green hydrogen.
Insider Monkey database indicates 24 hedge funds owning Plug Power Inc. (NASDAQ:PLUG). Though moderate, this institutional interest reflects the possibility of shareholders benefiting from a takeover.
18. Allegro MicroSystems, Inc. (NASDAQ:ALGM)
No. of Hedge Funds: 27
A global semiconductor company, Allegro MicroSystems, Inc. (NASDAQ:ALGM) manufactures sensors and power integrated circuits (ICs) for motion control and energy-efficient systems. With its wide range of product portfolio, including magnetic sensor ICs and power ICs, the company serves automotive and industrial markets, enabling precise measurement and efficient power management. With headquarters in New Hampshire, Allegro MicroSystems, Inc. (NASDAQ:ALGM) competes for market share against formidable competitors like NXP and Infineon, using its intelligent solutions that support advancements in e-mobility, clean energy, and automation technologies.
The company has been rumored to be a potential acquisition target since the beginning of 2025. In March 2025, Onsemi, a semiconductor manufacturing company, disclosed a bid of $6.9 billion in value for the takeover of Allegro MicroSystems, Inc. (NASDAQ:ALGM). However, the latter’s board member had deemed the offer inadequate. Subsequently, in April 2025, Onsemi withdrew its all-cash proposal to acquire the company. While some analysts believe that Onsemi would try to acquire the company again, others are of the opinion that the deal was closed with rejection from Allegro MicroSystems, Inc. (NASDAQ:ALGM).
Our Insider Monkey database noted 27 hedge funds currently holding positions in the company at the end of Q4 2024, exhibiting moderate institutional confidence, which may have been boosted by the anticipated merger between the two companies: Onsemi and Allegro MicroSystems, Inc. (NASDAQ:ALGM).
