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 Orbitz Worldwide (NYSE: OWW ) fell as much as 11% today after the company announced a secondary stock offering by a current shareholder.
So what: The online travel merchant said an affiliate of Travelport would sell 7.5 million Orbitz shares, or about 7% of the total shares outstanding. Underwriters will also have a 30-day option to purchase an additional 1.125 million shares. Unlike most secondary offerings, this will not dilute current shareholders, nor will Orbitz receive any proceeds from the sale.
Now what: Since the sale will not dilute shareholders, today's sell-off seems connected to the usual investor suspicion about a large shareholder's sale. However, Travelport owns nearly 50% of shares outstanding, so it is by no means divesting all of its holdings in the travel dealer. Orbitz shares have also been highly volatile over the last couple of years as the company attempts to get back on track; that situation may be exaggerating today's fluctuations. While a large sale isn't a positive sign, this news seems to be mostly noise. Investors would be better off focusing on Orbitz's fundamentals, which will ultimately determine the future of the stock.
Orbitz was a multibagger. Will this stock be your next one?
Give me five minutes and I'll show you how you could own the best stock for 2014. Every year, The Motley Fool's chief investment officer hand-picks one stock with outstanding potential. But it's not just any run-of-the-mill company. It's a stock perfectly positioned to cash in on one of the upcoming year's most lucrative trends. Last year his pick skyrocketed 134%. And previous top picks have gained upwards of 908%, 1,252% and 1,303% over the subsequent years! Believe me, you don't want to miss what could be his biggest winner yet! Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.