The stock market came back from a long holiday weekend Monday with mixed performance, and major indexes generally stayed pretty close to where they started the session. Investors seem to be waiting for the dozens of key earnings reports that companies will release over the coming week, including some high-profile names that are giants in emerging industries. Yet that didn't stop some market participants from bidding up share prices of high-flying companies. Zoom Video Communications (ZM 11.62%), KeyW Holding (KEYW), and Canopy Growth (CGC 10.24%) were among the top performers. Here's why they did so well.
This stock keeps Zooming higher
Shares of Zoom Video Communications rose more than 5%, adding to their huge gains on their first day of trading last Thursday. After an 80% jump from its IPO price, Zoom had many investors thinking that the video communications specialist's stock would take a break from its first-day run, but some still believe that the company has promise even at its rich valuation. Given the number of small upstarts in the technology field that have challenged even the largest players in the sector, the optimism over Zoom's potential to overtake video-conferencing rivals is consistent. You can expect an ongoing debate about Zoom's valuation, but already high prices didn't kill the stock's upward momentum Monday.
KeyW gets an offer it can't refuse
KeyW Holding saw its stock soar 42% following the cybersecurity specialist's announcement that it had signed a merger agreement to be acquired. Jacobs Engineering Group (J 2.20%) will pay $11.25 per share in cash to KeyW investors, valuing the company at an enterprise value of roughly $815 million. As KeyW CEO Bill Weber explained, "This transaction will propel KeyW's capabilities further and create new opportunities for research and development our customers need to enhance their national security and intelligence capabilities." A majority of KeyW shareholders need to agree to tender their shares, but based on the stock price, it looks probable that the deal will go through.
Canopy Growth continues to head higher
Finally, shares of Canopy Growth picked up another 8%. The cannabis company's stock climbed late last week after announcing that it had acquired an option to purchase Acreage Holdings (ACRGF) at a total valuation of $3.4 billion, contingent on marijuana production and sale being legalized under U.S. federal law. Analysts at GMP Securities followed through today by upgrading Canopy's stock from hold to buy and boosting its price target by more than 10%, citing the Acreage option deal and the synergies that could result from the combination. With many seeing legalization of marijuana becoming more likely, Canopy is doing everything it can to prepare if and when pot sales are possible on both sides of the 49th parallel.