Friday didn't bring a happy end to the week for the stock market, as news that China was looking to impose new retaliatory tariffs on the U.S. once again reawakened fears about prolonged trade tensions between the world's two largest economic powers. Major benchmarks posted steep declines in excess of 2%. However, some stocks benefited from favorable events that sent their share prices higher. Pivotal Software (PVTL), Carbon Black (CBLK), and Red Robin Gourmet Burgers (RRGB 1.05%) were among the top performers. Here's why they did so well.
Pivotal, Carbon Black get a double deal
Pivotal Software and Carbon Black saw their shares climb 9.5% and 6%, respectively, following news that a common buyer will acquire both of the companies. VMware said late yesterday that it would pay public shareholders of Pivotal $15 per share in cash for their stock, putting an enterprise value of $2.7 billion on the cloud-native platform provider. Meanwhile, VMware also proposed a $26-per-share buyout of cloud-native endpoint protection specialist Carbon Black, valuing the company at $2.1 billion.
Image source: Pivotal Software.
The joint move is geared toward bolstering VMware's overall cloud security offerings, helping to enhance its protection of client data while also introducing new ways to analyze and utilize the information that enterprise customers collect. VMware has made a number of acquisitions lately in the highly competitive cloud space, but the interesting thing with both Pivotal and Carbon Black is that the premiums shareholders will receive aren't all that big. That could spur competitive bids from other corners of the tech sector, potentially leading to even further increases in the stock prices of these two companies.
Red Robin gets an earnings boost
Elsewhere, shares of Red Robin Gourmet Burgers gained 6%. The burger-focused restaurant chain said that adjusted earnings per share more than doubled in the second quarter compared to a year ago. Red Robin did have some trouble attracting customers; guest counts dropped 6.4% on a comparable-restaurant basis, pulling overall comparable-restaurant sales down 1.5%. Yet interim CEO Pattye Moore was pleased with some signs of recovery from Red Robin, and shareholders seem encouraged that moves to embrace technology and other innovations will help restore the burger specialist's past history of success.
