Why Allscripts Healthcare Solutions Popped

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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 health care information technology company Allscripts Healthcare Solutions (Nasdaq: MDRX  ) rose as much as 21% after a report came out that the company may be up for sale.

So what: According to a report from Bloomberg, Allscripts may be interested in putting itself up for sale. Bloomberg cites people familiar with the matter and notes that Allscripts has contacted various private-equity and public firms, including Blackstone Group (NYSE: BX  ) , attempting to drum up interest in the company.

Now what: Now I think we avoid Allscripts like the plague. If you recall, Allscripts lost a huge chunk of its value back in April as sales shrunk, development costs spiked, and three of its board members left. Noting now that the company wishes to put itself up for sale does not bode well in any way, form, or shape. To me, it appears the company can't figure out what's wrong and is looking for the quickest way out to maximize shareholder value. If Allscripts doesn't find a buyer, things could get ugly all over again.

Craving more input? Start by adding Allscripts Healthcare Solutions to your free and personalized Watchlist so you can keep up on the latest news with the company.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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