Why Textron Inc.'s Shares Jumped

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 Textron (NYSE: TXT  ) jumped 13% late in trading after rumors of an acquisition hit the market.

So what: The Financial Times reported midday that Beechcraft Corporation will be sold to Textron in a deal worth $1.4 billion. This would expand the line of aircraft available to customers, and would be a much more reasonable price than a failed sale to a Chinese buyer for $1.79 billion. 

Now what: We don't know the exact terms or the financial impact of Beechcraft, so buying on the rumor is definitely risky. It's also well known that private jet demand, and falling defense spending, is hampering the aircraft industry. With that said, if a deal is done at the right price, this could be a huge win for Textron, so keep an eye on the company's press releases to see if a deal does go through.

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12/18/2014 4:01 PM
TXT $41.99 Up +1.34 +3.30%
Textron, Inc. CAPS Rating: ***

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