Please ensure Javascript is enabled for purposes of website accessibility

Why InvenSense, Inc. Stock Skyrocketed 67.4% in December

By Steve Symington - Jan 3, 2017 at 7:18AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The motion-sensing chip company is being acquired. Here's what investors need to know before that happens.

Image source: InvenSense, Inc.

What happened

Shares of InvenSense Inc. (INVN) jumped 67.4% in the month of December, according to data provided by S&P Global Market Intelligence, after the motion-sensing chip company agreed to be acquired by Japan-based TDK Corp. (TTDKY 0.92%).

So what

The jump came in two stages. First, InvenSense stock rose almost 30% in a single day on Dec. 9, 2016, as Reuters reported that TDK had offered $12 per share to purchase the smaller company. That offer would have reflected a 45% premium to InvenSense's opening price that day, but still only 3% above its 52-week high set around the same time a year earlier. 

Then after hovering just below $11 per share for the next week and a half, InvenSense shares jumped another 18% on Dec. 21, 2016 as the two companies made it official. TDK ultimately increased its offer to $13 per share, representing a 52.4% premium over InvenSense's 60-day volume-weighted average trading price as of the previous day's close. 

Now what

Shares of InvenSense currently trade at $12.79 as of this writing, or a minuscule 1.6% discount to the acquisition price. This reflects the near certainty that this deal -- which has already been unanimously approved by both companies' boards of directors -- will be completed as expected in the second quarter of InvenSense's fiscal year ending March 31, 2018. As such, I think InvenSense investors would be wise to take their profits and put them to work elsewhere.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

InvenSense, Inc. Stock Quote
InvenSense, Inc.
TDK Corporation Stock Quote
TDK Corporation
$31.99 (0.92%) $0.29

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.