December 20, 2012
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 The Greenbrier Companies (NYSE: GBX ) fell 12% today, after its ongoing saga with American Railcar Industries (NASDAQ: ARII ) , which also fell 10%, continued.
So what: The Carl Icahn-controlled American Railcar said it would bump up its offer for Greenbrier to $22 per share, still below what Greenbrier's board wants. Greenbrier came back and said it would buy American Railcar for a small premium. Both stocks are falling on the back and forth negotiations.
Now what: Icahn has wanted to combine the companies for some time, and investors had been betting on a higher offer for Greenbrier; but even that doesn't seem like it will go through. The offer from American Railcar ends on Friday at 2:00 PM ET, so that's why the stock is down sharply today.
This is why betting on mergers is a tough business. Now that it appears that both sides are set against a merger, investors in both companies will lose out. Stay tuned to what happens next in this back and forth story.
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