Ariba Shares Jumped: What You Need to Know

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 Ariba (Nasdaq: ARBA  ) soared as much as 16% in early trading on heavy volume, after German software supplier SAP (NYSE: SAP  ) announced plans to acquire online HR specialist SuccessFactors (Nasdaq: SFSF  ) for $3.4 billion.

So what: Issues notwithstanding, Ariba could enjoy a similar takeout bid. The one-time dot-com darling continues to make a good living supplying online tools for sourcing supplies, technology, and the like. SAP and Oracle (Nasdaq: ORCL  ) are its top competitors.

Now what: What would its larger rivals pay? SAP is bagging SuccessFactors for about 7.6 times sales; Ariba trades for 6.3 times sales as of this writing. The delta could make for an interesting arbitrage opportunity -- but only if you believe an acquisition is inevitable. What's your take? Would you buy shares of Ariba at current prices? Please weigh in using the comments box below.

Interested in more information about Ariba? Add it to your watchlist.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1736358, ~/Articles/ArticleHandler.aspx, 12/18/2014 8:37:34 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement