Why Express and OpenTable Shares Spiked Today

The Dow finished modestly higher today as OpenTable and Express soared on acquisition news.

Jun 13, 2014 at 10:00PM

Stocks closed the week on a positive note, but gains were limited, as investors kept one eye on the simmering conflict in Iraq. All three major indexes finished the day up 0.3% as the Dow Jones Industrial Average (DJINDICES:^DJI) added on 42 points. Oil prices also hit a nine-month high on the Iraq concerns, climbing to $106.77. 

In today's economic news, the Producer Price Index showed wholesale prices falling by 0.2% in May after a jump of 0.6% in April, which may just be a correction after outsized growth in April, as food prices soared in that month. While it's surprising to see prices falling, the PPI shows that inflation continues to be under control, which should ease any concerns the Fed may have about overstimulating the economy. Elsewhere, the preliminary reading of the University of MIchigan consumer confidence index showed the gauge at 81.2, falling slightly from June's total of 81.9, and missing estimates of 82.9. It was a three-month low for the index, but consumer confidence remains relatively strong, though concerns about Iraq and higher fuel prices may be weighing on the average American. 

Images

Among stocks making headlines today was Express (NYSE:EXPR). Shares jumped 21% after private equity firm Sycamore Partners said it was interested in acquiring the struggling apparel retailer. In a regulatory filing, Sycamore revealed it had accumulated a 9.9% stake in Express, and it sent a letter to the retailer expressing its interest in taking the company private. In response, Express established a special committee to "determine its best course of action," and adopted a shareholder rights plan, also known as a poison pill, to dissuade Sycamore, or another investor, from acquiring more than a 10% stake in the company. Express has stumbled upon tough times as same-store sales dropped 10% in its last quarter and it lowered its guidance, and the retailer has also missed earnings estimates in it last three reports. In recent years, Sycamore has taken clothing chains such as Hot Topic and Talbot's, private so the two may be a perfect match. Considering the steep sales declines Express has faced, a buyout may be the best option for shareholders.

Elsewhere, OpenTable (NASDAQ:OPEN) rocketed 48% higher after priceline.com snatched up the reservation specialist for $2.6 billion. Priceline shares fell 3% on the day, perhaps a reflection of the steep premium it paid. The acquisition gives the online travel leader an avenue in the restaurant industry, as airline and hotel reservations have become highly competitive, and provides it with ready-set relationships with more than 23,000 restaurants. OpenTable generates revenue by charging restaurants $1 every time a diner makes a reservation through its system. Priceline has risen to a valuation of more than $60 billion, in large part due to acquisitions of companies such as Kayak and Booking.com, so OpenTable should continue its strong growth under its auspices. The news also sent shares of Yelp up 13% as investors speculated that the business-review site could be an attractive acquisition target, as well.

Are you ready for this $14.4 trillion revolution?
Have you ever dreamed of traveling back in time and telling your younger self to invest in Apple? Or to load up on Amazon.com at its IPO, and then just keep holding? We haven't mastered time travel, but there is a way to get out ahead of the next big thing. The secret is to find a small-cap "pure-play," and then watch as the industry -- and your company -- enjoy those same explosive returns. Our team of equity analysts has identified one stock that's ready for stunning profits with the growth of a $14.4 TRILLION industry. You can't travel back in time, but you can set up your future. Click here for the whole story in our eye-opening report.

Jeremy Bowman has no position in any stocks mentioned. The Motley Fool recommends OpenTable. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers