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Polycom (PLCM) Stock Gains After Elliott Management Discloses Stake

NEW YORK (TheStreet) -- Shares of Polycom (PLCM - Get Report) were gaining 15.1% to $13.18 on Thursday after activist investor Elliott Management disclosed a stake in the videoconferencing and unified communications hardware company.

Elliott said it now owns about 5.8 million shares of Polycom, representing a 4.4% stake in the company. In an open letter Elliott called for the company to merge with competitor Mitel (MITL), which the activist investor owns a 6.3% stake in.

"The combination would double the scale of Polycom to $2.5 billion in revenue," the activist investor said in the letter. "Between Mitel's $164 million of EBITDA in 2014 and $100 $150+ million of synergies available, Polycom would quickly become a $500+ million EBITDA company following a combination with Mitel. Scale provides important competitive advantages in addition to the financial benefits of greater diversification, stability and access to capital markets."

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Eliott said it believes Polycom's stock could potentially increase 30% to $14.75 a share by the end of 2016, and nearly 85% to $20.50 by the end of 2017. The...