Why JDA Software Shares Popped

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 JDA Software (Nasdaq: JDAS  ) were flying off the shelves today, up as much as 12%, on reports that the company is in the advanced stages of finding a buyer.

So what: JDA, which specialized in supply chain management and business enterprise software, reached a 14-year high on the news. Reuters broke the story, saying that the company has partnered with JPMorgan Chase in the matter, but JDA has not commented to the public. JDA's largest shareholder, Praesidium Investment Management, has raised its stake in recent months to 8.9%.

Now what: Stocks routinely bounce when a possible buyout is looming, because investors expect to receive a premium on their shares. It also doesn't hurt that the report said JDA had received interest from multiple parties. Still, this is just a developing story, and the gain in the stock is essentially speculative, because no one knows the price of a potential buyout. Investors should be heartened, but would also be mindful to follow JDA news in the coming weeks. You can receive updates by adding the company to your Watchlist here.

Jeremy Bowman has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. 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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