Why Merge Healthcare Shares Got Crushed

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 Merge Healthcare (Nasdaq: MRGE  ) fell as much as 18% today after announcing some details of a big sale.

So what: The sale in question today is a $2.75 million kiosk sale to higi LLC, a company controlled by Michael Ferro, the chairman of Merge Healthcare. This brings up questions of conflicting interest and was apparently enough to knock $88.2 million off the company's market cap today.

Now what: The audit committee reviewed the sale, which occurred at market prices available to any buyer, and said it was cleared for completion. The kiosks are health information kiosks that provide point-of-use health information to customers including vitals, weight, and blood pressure. This isn't a competitive move -- it's helping Merge's product get out -- so I'm scratching my head over the direction of the trade today.

Interested in more info on Merge Healthcare? Add it to your watchlist by clicking here.

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.

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