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 Given Imaging (NASDAQ: GIVN ) , a medical device maker known best for its camera-in-a-pill, dropped as a much as 13% after announcing that it was halting its sale review process.
So what: In October, Given Imaging announced that it was exploring the possibility of selling itself or merging in order to unlock shareholder value. Today's announcement squashed those hopes and made it clear that it plans to continue operating as normal. It was also announced that the company's largest shareholder, Discount Investment Corp., which owns 45.5% of all shares, is seeking to sell its investment in one block.
Now what: Any time your largest shareholder comes out and says it wishes to sell 14.1 million shares, chances are it's not going to be a good day! Analysts had pegged Given Imaging's buyout value significantly higher than where the stock currently trades, so only time will tell if management's decisions to shirk a buyout will be in the best interest of shareholders. By the looks of Discount Investments' reaction, I'm gathering investors are quite skeptical of the move.
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