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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of JAKKS Pacific (Nasdaq: JAKK ) surged more than 24% Wednesday after investment fund Oaktree Capital Management offered to buy the toy maker for $670 million.
So what: The all-cash offer values JAKKS at $20 per share, representing a 25% premium to its Tuesday closing price. According to Oaktree, taking JAKKS private would allow the company to "execute a long-term value creation strategy free from the pressures of managing short-term objectives and seasonality."
Now what: When you make more than 20% in one morning, taking at least some dough off the table seems like the prudent thing to do. While Oaktree said it is willing to raise its bid if JAKKS could demonstrate more value during the due diligence process, the upside seems small given the risks that still remain. After all, with toy giants Mattel (NYSE: MAT ) and Hasbro (NYSE: HAS ) now trading at a forward P/E discount to JAKKS, you'll have plenty of fun places to roll your bet over.
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