Avis Budget (CAR +3.98%) came up short in the Dollar Thrifty bidding war that could have potentially made it the largest traditional auto-rental agency, but a single deal this week will find the company atop the faster-growing car-sharing industry.
Avis Budget is buying Zipcar (ZIP +0.00%) in a $491 million deal, and it will be a surprisingly synergistic deal. Avis lacks a notable presence in offering conveniently accessible cars in major metropolitan areas that are available by the hour. Zipcar can use access to a larger fleet, particularly on weekends -- which is the lull for Avis and its business travelers.
The buyout will be bittersweet for Zipcar investors. The company commanded a market cap of $1.2 billion within minutes of going public, and now shareholders are being cashed out at a discount to its 2011 IPO. However, kicking off the first trading day of 2013 with a nearly 50% pop sounds pretty good these days.
Briefly in the news
And now let's take a quick look at some of the other stories that shaped our week.
- Zynga (ZNGA +0.00%) shut down more of its games as 2012 came to a close. Let's see whether "resentment" is a hit as a Draw Something word.
- Baidu (BIDU 1.06%) got some more hate mail, as another analyst lowered its price target on shares of China's leading search engine. The price target went from $82 to $80.
- Netflix's (NFLX 0.82%) Christmas Eve outage was unfortunate, but Amazon.com (AMZN +1.63%) apologized this past weekend. Hey, Netflix. Amazon is sorry that its own video streaming service was running perfectly fine while your more popular offering stumbled on Amazon's servers. That fixes everything. Right?
