Shares of Beacon Roofing Supply (NASDAQ:BECN) stock are up 18.9% as of 12:20 p.m. EST. Curiously, though, this sudden surge in stock price comes not in response to earnings (at least not in direct response), but rather two days after earnings came out.
On Monday, Beacon reported the disappointing news that it had earned only $0.54 per share (and $1.07 per share, pro forma) in fiscal Q4 2018, whereas Wall Street had been looking for per-share profits of $1.36. Beacon's sales of $1.94 billion likewise fell short of analyst expectations for $2.01 billion in sales.
What has changed since then to spark sudden renewed interest in Beacon Roofing shares? As best I can tell, the only significant news at Beacon today is a Form 8-K filing by the company to the effect that "at the request of CD&R" (the company that bought 400,000 shares of Beacon preferred stock, providing Beacon with the funds it needed to buy Allied Building Products last year):
... the Company Board consented to the acquisition by CD&R of additional shares of Common Stock in open market purchases or through the use of forward purchase agreements or similar programs with third-party financial institutions.
CD&R had previously been prevented from acquiring shares of Beacon as one of the conditions of its being allowed to purchase the preferred shares. This new agreement, although it doesn't allow CD&R to acquire Beacon outright -- or even confirm its desire to do so), appears to suggest at least that there may be interest in CD&R buying Beacon.
What comes next is hard to say, but there do appear to be at least grounds for a rumor, now, that Beacon Roofing has just made itself an acquisition target. Investors seem to think that such a rumor alone is reason enough to run up the stock price.