Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Why NII Holdings Stock Just Popped 19%

By Rich Smith - Nov 2, 2018 at 4:41PM

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

All of a sudden, Nextel is popular again.

What happened

For the second time in two months, shares of Brazilian Nextel cell-service operator NII Holdings ( NIHD ) were soaring today -- up 18.8% on rumors that the company may be for sale.

This morning, mergers and acquisitions news site CTFN reported that Telecom Italia subsidiary TIM Brasil "is in early stage negotiations for the acquisition of troubled rival Nextel."

Map of Brazil under a magnifying glass

Investors are taking a closer look at a possible acquisition candidate in Brazil. Image source: Getty Images.

So what

As rumors go, this isn't exactly news. Bloomberg reported in September that Telecom Italia was sniffing around Nextel. But the fact that the rumor is being repeated today by a second source suggests it may deserve more credence than if this was a single-source story -- and almost two months old, with nothing coming of it, to boot.

Now what

What this news does not tell us, however, is how likely it is that Telecom Italia will bite the bullet and buy NII (which -- with no profits and negative free cash flow -- isn't exactly a prize). Nor does it tell us how much Telecom Italia might be willing to pay for NII and its Nextel franchise, or whether that price will be above or below NII Holdings' new and improved share price of nearly $8.

Tread warily, investor. Because if this rumor proves false, or if Telecom Italia decides to bid less than what NII stock is currently fetching, you could still get burned.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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

NII Holdings, Inc. Stock Quote
NII Holdings, Inc.

*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 service.

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 12/02/2021.

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

Our Most Popular Articles

Premium Investing Services

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