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 Line Stock Popped 26% on Wednesday

By Steve Symington - Nov 14, 2019 at 7:00AM

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 messaging app is in talks to potentially merge with Yahoo! Japan.

What happened

Shares of Line Corp. ( LN ) jumped 26.6% on Wednesday after Reuters reported the messaging app company is in talks for a potential merger with SoftBank's Z Holdings (formerly known as Yahoo! Japan). Separately, Z Holdings stock rallied 9.2% today on the news.

So what

Z Holdings confirmed the talks to Reuters late Wednesday, while Line issued a statement that it is indeed "considering ways to improve its corporate value" -- though both companies insisted nothing is set in stone just yet.

Chess board with black pawns on the left, wood colored pawns on the right, and one split with both colors in the center.

IMAGE SOURCE: GETTY IMAGES.

Now what

With a combined market capitalization of nearly $30 billion as it stands -- and with a Japanese user base of more than 80 million for Line -- Z Holdings and Line together could represent a veritable force to tackle Japan's budding QR code payment app industry. But the news shouldn't be entirely surprising considering Softbank not only owns nearly half of Z Holdings' outstanding shares, but also acquired a majority (51%) stake in Line's Mobile telco segment early last year.

That certainly doesn't guarantee the two companies will come to terms on a merger. But if they do, Reuters' sources suggested earlier Wednesday that it could happen by the end of this month.

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

SoftBank Group Corp. Stock Quote
SoftBank Group Corp.
SFTBF
$49.66 (3.94%) $1.88
LINE Corporation Stock Quote
LINE Corporation
LN
Z Holdings Corporation Stock Quote
Z Holdings Corporation
YAHOY

*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
652%
 
S&P 500 Returns
142%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/08/2021.

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.