Stocks are taking a tumble so far on Thursday. Investors are disappointed with the prospects for significant US tax reform and taking profits after several weeks of mostly positive trading.
Today, we focus on a Top Performer that managed to grow amidst the broader downward momentum. Major acquisitions have been a great source of profitable trades for NQ users over the past week, and today is no exception.
On Thursday morning, Magicjack announced that it has come to an agreement to be purchased by B. Riley Financial, a diversified financial services company. They will pay a price of $8.71 per share, representing a 23% premium on CALL’s price this morning.
Investors quickly moved to arbitrage this premium, buying the stock to the tune of 47% gains at the time of this writing. The stock still sits just below the reported acquisition price.
Magicjack Vocaltec is a leading provider of cloud-based VOIP services. The acquisition comes after an exhaustive review of strategic alternatives by Magicjack, whose stock price has been in decline since peaking near $25 in 2013. Magicjack initially rose to prominence through a device that enabled consumers to plug standard phones into a special USB adapter on their laptop, going around traditional phone service.
Riley hopes to achieve substantial operational synergies with Magicjack as it is integrated into their diversified portfolio of companies. They focus on operating a portfolio of firms with strong cash flows. Proven earnings continue to be the surest sign of explosive gains in this highly valued market.
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