Why Zipcar Shares Zoomed

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

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 Zipcar (UNKNOWN: ZIP.DL2  ) zoomed 48% today after car rental company Avis Budget Group (NASDAQ: CAR  ) agreed to buy the car sharing network for about $500 million.

So what: The all-cash deal values Zipcar at $12.25 per share and represents a whopping 49% premium to its closing price on Monday. Avis is making the move to get in on the high-growth car-sharing market and compete with Hertz Global Holdings (NYSE: HTZ  ) which already has a service in the space, and judging by its own stock's 5% pop today, Mr. Market is pleased with the price being paid to do it.

Now what: Avis expects to generate $50 to $70 million in annual synergies as a result of the deal. "We see car sharing as highly complementary to traditional car rental, with rapid growth potential and representing a scalable opportunity for us as a combined company," said Avis Chairman and CEO Ronald Nelson. "We expect to apply Avis Budget's experience and efficiencies of fleet management with Zipcar's proven, customer-friendly technology to accelerate the growth of the Zipcar brand and to provide more options for Zipsters in more places." So while Zipcar shares might be all popped out, Avis and its newly bolstered growth potential might be worth looking into.

Interested in more info on Zipcar? Add it to your watchlist.

Interested in more info on Avis? Add it to your watchlist.

Read/Post Comments (2) | Recommend This Article (3)

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.

  • Report this Comment On January 02, 2013, at 3:31 PM, leaderoftheback wrote:

    All I can say is...OUCH!

    A 50% premium?

    So much for "Buy and Hold!"

    I think this locks in a lot of losses...and I predict that this is not the end of it...either a bidding war will break out, or a million lawsuits.

  • Report this Comment On January 02, 2013, at 3:40 PM, mrbkush wrote:

    Hey why not publish a list of all the bs pump stories your guys wrote. Hahahaha

Add your comment.

Compare Brokers

Fool Disclosure

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: 2175645, ~/Articles/ArticleHandler.aspx, 10/1/2016 1:26:38 AM

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...

Today's Market

updated 4 hours ago Sponsored by:
DOW 18,308.15 164.70 0.91%
S&P 500 2,168.27 17.14 0.80%
NASD 5,312.00 42.85 0.81%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
ZIP.DL2 $0.00 Down +0.00 +0.00%
Zipcar CAPS Rating: ****
CAR $34.21 Up +0.48 +1.42%
Avis Budget Group CAPS Rating: **
HTZ $40.16 Up +1.36 +3.51%
Hertz Global Holdi… CAPS Rating: ***