A lot of merger and acquisition lately of late, huh? Recently, we learned Alcoa (A) was looking to buy Alcan (AL) for $27 billion, while Armor (AH) okayed a $3.3 billion takeover by BAE Systems. News Corp. (NWS) sold its stake in Australia's Fairfax -- a rival in a sense -- for $300 million. This is news that came less than a week after we heard News Corp. was looking to buy Dow Jones & Company for $5 billion. Helen of Troy (HELE) bought Belson Products, and Citigroup (C) bought BISYS (BSG) for $1.4 billion. What's going on?

In a nutshell, companies are thinking it's currently better to buy growth rather than create it organically. Sometimes they're right, and sometimes not. When the competition for more revenue or for companies to acquire heats up and large corporations get desperate, then M&A can really take off. I don't think there's much question now that acquisitions have become more and more numerous over the last few weeks.

That in itself is no big deal. What is a big deal, however, is what frequently happens when we really start to see so many merger deals -- many of which are a little overpriced. In short, it might be a bearish sign, at least for a short while.

First things first though - a little theory, to understand the downside potential. Why would a company buy a technology, patent, customer base, etc. rather than going out and building the same on their own? The fact is, sometimes the bigger financial risk is doing something yourself. By acquiring those kinds of assets, a large corporation doesn't have to wait for any R&D period, and they can immediately put revenue on the top line buy buying a revenue-bearing entity.

The cost? Oh yeah, there's a downside. While the top line might improve, nothing is ever free. The better the acquisition is, the more it costs, which means a little or a lot of debt can be racked up to own a revenue-bearing project. All to often, the cost of the acquisition is far greater than the sum total of what the acquisition will bear in terms of total sales. And don't think for a minute that corporate management isn't capable of letting anxiety and pressure cloud their judgment.

In other words, M&A maybe a sign of the easy money being sought, which may also be only a short-term proposition. The ideal growth scenario? Directing that M&A money into the development of your own technology, research, market cultivation, etc. By doing your own legwork, you control your own destiny, and can do things your way without retro-fitting just to integrate a new enterprise into your fold.

The Sprint-Nextel (S) fiasco may be the poster child for this theme. The merger a couple of years ago has been disastrous for both sides of the deal, as integration of the two companies has so far been elusive. Though the problems may get worked out eventually, and the stock seems to be doing well, merging created more problems than it solved. But there's a much more obscure reality hidden in too many of these acquisitions.

It always makes me wonder whenever a company or a CEO is so readily willing to be bought. Granted, if a takeover is inevitable, then you may as well jockey to do things on the best terms possible rather than risk a hostile takeover and just accept what you're given. But still, why would a management team fight to get to the top only to hand at all over to someone else? In a word, money. Assuming the top tier of a corporation's management team is in the know, it's also reasonable to assume they know their competitive status within the industry. If the better deal financially seems to be taking the deal offered rather than fight to control their own destiny, what does that tell you about where things are in the growth cycle? A lot of experts would argue it's a sign that the growth cycle was peaking, or had already.

Moreover, a great number of these buyout deals include a golden parachute for top management, yet another incentive to put a company's shareholders interests second to management's interests.

The litmus test may be a measure of how many deals are done that shouldn't have even done. A healthy pace of intelligent M&A deals is bullish. A healthy pace of poor M&A deals isn't exactly something that should excite shareholders. But, when an M&A deal is done when it should not have been done at all, that's when market-wide worry may be merited.

And just so you know, one of the likely culprits behind all the recent M&A may be cheap debt. When, not if, debt isn't cheap anymore, the interest in acquisitions may drop like a rock. If M&A is the only thing holding the bullishness together at the time, you may want to grab a parachute. In the meantime though, nobody seems to mind the risk. Remember, as long as the M&A interest persists, there's still bullish money to be made. The risk comes when it stops. And, the longer it persists, the bigger the risk becomes.

By the way, this kind of macro-view may take weeks or months to really materialize. And, it may take weeks or months to run its course. In other words, were not saying the market's bound to crash tomorrow -- if it crashes at all. We're just saying we see a legitimate concern.

Price Headley is the founder and chief analyst of BigTrends.com.