Stocks finished modestly higher on Friday, closing a disappointing week for the stock market as investors mulled the ongoing impact of Iraqi tension on the geopolitical and global economic picture. In yet another example of the resilience of the market, though, even the slightest pullback appeared to draw interest from corporate buyers, with merger and acquisition activity again playing a role in the market's positive mood today. Among the best performers were Yelp (YELP 4.71%), TW Telecom (NASDAQ: TWTC), and International Game Technology (IGT +0.39%), all of which were connected in some way to M&A news today.
Yelp climbed 14% as investors in the online review service reevaluated the value of their shares in light of the buyout offer that online-reservation service OpenTable received. Although their areas of specialization are different, both Yelp and OpenTable rely on the social aspects of their websites to support their respective business models. Still, as Fool contributor Alex Planes noted earlier today, Yelp hasn't been profitable, while OpenTable has had substantial earnings over time. It's possible that Yelp might find itself the target of a similar buyout attempt, but it's far more likely that this represents yet another example of an unjustified rise in shares throughout an industry when only one company is a logical target for a particular acquirer.
TW Telecom jumped 12% as investors weighed the possibility that Level 3 Communications (LVLT +0.00%) might seek to buy out the network-services provider. The two companies have been at the center of merger speculation for a long time, with TW Telecom having explored strategic alternatives as early as 2012. With a pick-up in overall activity in the telecom industry, companies like TW Telecom are getting more attention from investors as well as from larger peers in the industry.
International Game Technology rose more than 10% as shareholders continued to speculate about a potential sale of the slot-machine and gaming-equipment maker. Today, reports surfaced that a major lottery operator and a possible private-equity buyer could be interested in getting involved in bidding for International Game Technology, which had only recently hired a Wall Street consultant to assist it with a sale. With so many interested parties, shareholders hope that International Game Technology will fetch an even better price than originally expected when the company first announced its plans.
