Dell is making a big move into the data storage market with a $1.15 billion all-cash deal for 3Par Inc. It comes at an interesting time, as 3Par's growth and share price had recently slowed and it is still losing money. The offer is an 86% premium to 3Par's closing price Friday of $9.65

The move shows Dell has an interest in moving outside the commoditized world of PCs and comsumer electronics and into higher margin data-center products. 3Par specializes in building large storage arrays for corporations and data centers which can be "virtualized," or partitioned so that the system can handle data from many applications at once.

At any rate, it's paying off big for 3Par shareholders this morning with the stock indicating it will trade up nearly 85%.

• Hulu is said to be preparing an IPO that would value the company at more than $2B (New York Times).
• Japan's economy is stuck in its tracks again. And theoretically, that means China is now more powerful (Bloomberg). Bullish on Moo-shu, bearish on Sushi?
• Want a 4.4% mortgage? Good luck, says Fortune.
• China's currency fell to a seven-week low agains the U.S Dollar (Wall Street Journal). Remember all that noise about them strengthening the Chinese currency?
• This is what I want for Christmas: A Ferrari simulator (Physorg.com). Scratch that, I want a real Ferrari.
• Facebook is buying Chai Labs for $10 million (VentureBeat). Here's a fun fact: it was founded by a former Google executive.
• VCs and Super Angles: The War for the Entrepreneur (TechCrunch). Hmm, a bunch of rich arrogant people beating each other to a pulp. Sounds fun.
• Tim Ferriss thinks he has a way for you to read 300% faster (Tim Ferriss blog).

Bloomberg yesterday started the rumor-mill going that Sanofi-Aventis is on the prowl for a large biotech company, sending many biotech stocks higher on Friday (on a day in which the market is down).

The rumors make sense, as big pharma is constantly on the prowl for solid biotech companies. Let's take a look at the dynamics and which companies would be most attractive from a valuation standpoint. The three companies mentioned cited by Bloomberg as targets include Allergan (AGN), Biogen-Idec (BIIB), and Genzyme (GENZ).

The Wall Street Journal, trying to catch up with Bloomberg, has tossed in Amgen (AMGN), Gilead (GILD), and Celgene (CELG).

Let's take a closer look at all of these stocks to try to see who is the best bet. Biogen jumps out to me the most. Including the most recent quarterly results, Biogen is trading at a forward P/E of 10. It has an operating margin of 30%, return on equity of 16%, and has been growing at a 7% clip. The market cap is $13B.

SAP AG has agreed to acquire Sybase Inc. in a deal valued at $5.8 to beef up its mobile platform and help compete with arch-enemy Oracle Corp. The deal is an all-cash offer for Sybase shares at $65 per share. Could you have spotted the deal coming? Yes. I'm a big fan of stock screens. Sybase was on the radar here at the Rayno Report after it started showing up on stock screens as being undervalued, with the screens singling it out for solid profit growth and a low P/E value. We cited it in early March on our shopping list of stocks to pick up after the February market swoon. Another reason is that Fred Hickey, well-known technology stock analyst, was on top of the Sybase situation, calling it an undervalued company with buyout potential in this year's Barron's roundtable. Hickey has the hot hand, he also called out Novell for its large cash position just before it was picked up a bid from hedge fund Elliot Associates. If you were sitting on shares of Sybase, there's a huge premium. The deal price is 56 percent higher than the closing price of $41.57 yesterday. In after-hours trading stock last night, the stock was up 35 percent at about $56.

HP is starting to sound like the first year of the Obama Adminstration. They have their own version of fixing the economy, winning a war, and giving everybody health insurance -- it's beating Cisco with 3Com and then conquering the mobile-phone market with today's announcement that they'll buy Palm for $1.2B. Is HP biting off more than they can chew? Can't say we were right about Palm, or were we? HP did the deal at $1.2B. It surprises me. My premise was that paying over $1B for a company that is losing money and market share, with a negative book value, and $400B in debt is just slightly nutty, but what do we know. Apparently the HP CFO knows more than me.

As rumors run amok about who's going to buy Palm, I have to point out what I did earlier: I can't see paying a premium for this company. A lot of the reports are missing some basic facts, such as: Palm is losing money and has many liabilities. And it has a negative book value, according to numbers reported by Capital IQ. In a world of rapid-fire news, blog, and opinion reports and itchy trigger-finger day traders, it's fun to watch everybody jump on the Palm story. Bloomberg has reported that the company has engaged bankers to sell the company. People ate it up pretty quickly, buying up the shares on the news that the company is now officially on the block, thinking it would result in some sort of quick, generous return.But always remember there's a key element in doing a deal: The price. It doesn't always work in your favor.

It's time for an update on Cubist Pharmaceuticals (Nasdaq: CBST), a small, fast-growing drug stock we've been following here. Our technical and trading outlook has held to form (for once!), as we advocated picking up the shares in the mid-teens for a trade into the twenties. Yesterday the stock moved to new highs in 2010, hitting $21 bucks and change. This morning shares are off .20, but that's no big deal after a move of about $1.50 over two days. I still hold CBST and I'm not ready to sell it in case this rally gains momentum. The stock could easily trade into the upper 20s on a breakout above $22. To recap the Cubist story: The company grew 30% in 2009 and has a Return on Equity (ROE) of 60%. The general rule here at Rayno Report is we like growth stocks with an ROE that is higher than it's P/E. We started buying CBST with the P/E around 12. The valuation has expanded now giving CBST a P/E of 19. But given it's growth rate (30% in 2009, 160% over five years), that's still not too high. If the company lives up to its revenue growth plans in 2010, it can easly grow the valuation. So I'm hanging on to see what this company can deliver. Another item: CBST often comes up on the lists of potential acquisition candidates. Disclosure: Long CBST

The markets are entering a "digestive" phase today with what looks like a pullback, possibly driven by -- what else -- China? The Chinese government raised capital requirements in a move to slow the credit expansion and economy. You have to wonder if the the Chinese ministers were reading the Economist, as I was last night, which is warning of the potential for growing asset bubbles in emerging markets and especially China. Well, what do you want, you can't have it both ways. Economic depression or bubbles -- take you pick. Personally I prefer bubbles, but that's just me. Let's run through the other news, because as always there is lots happening across the globe:

• Some jobs won't return, says the Wall Street Journal. Well, duh. I know mine's not coming back. Shouldn't have put that Whoopee Cushion on the boss's chair.
• Alcoa disappoints, driving down shares in Europe (New York Times). I can assure you that's not the first time that's happened.
• Paul Krugman: Learning From Europe (New York Times). I thought the Krugster was going to give is tips on how to make Espresso. Alas, no. He's trying to convince us that they like to work in France.
• Speaking of France. I thought I'd catch up on what Le Monde has to say. Holy cow, Sarah Palin makes the front page!
• Don't you hate it when you are awash with data from drones? (New York Times)
• Some reactions to the Mark McGwire steroid admission (L.A. Times).
• Next time, I have to remember to hire a mermaid for my party (L.A. Times).
• The Nexus One honeymoon is over (PC World)
• Google's Nexus One termination fee is $350 (Engadget)
• Best and Worst of CES (Scobleizer).
• Shanda Games acquires Mochi Media for $80M (TechCrunch)
• New sex hormone found -- could lead to male birth control (National Geographic). I can't think of a more dangerous idea.
• The birth of a massive star (MITnews).