Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of insurance technology provider Ebix (NASDAQ:EBIX) plummeted more than 40% today after the company and an affiliate of Goldman Sachs Group (NYSE:GS) scrapped their planned merger because U.S. regulators have started an investigation into allegations of misconduct at Ebix.
So what: Ebix's stock closed yesterday at $19.72, just under Goldman's agreed upon purchase price $20 per share, so speculators who were banking on a buyout are naturally heading straight for the exits. Of course, Ebix has been under attack from short-sellers about inaccuracies in its financials for a while now, so today's news also reignites plenty of worry on Wall Street over the company's future.
Now what: Ebix said it will comply with regulators and continue to consider strategic options. "We believe the allegations in the class action suits are without merit," said Chairman and CEO Robin Raina in a statement. "The Company's balance sheet remains strong and we believe the Company is well positioned for future growth and success." With the stock now off a whopping 50% from its 52-week highs and trading at a P/E of 6, enterprising Fools might consider taking advantage of today's huge setback to buy into that optimism.
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Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Ebix and Goldman Sachs. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.