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 Moneygram International (MGI) rose as much as 41% early Wednesday, then settled to close up nearly 22% following rumors it could be an acquisition target.
So what: Citing "people with knowledge of the matter," Bloomberg reported that Western Union (WU 1.35%) is in "early stage" talks to acquire its smaller competitor. Joining forces, Bloomberg notes, could help the two companies better cope with pricing pressures as companies such as WorldRemit and Wal-Mart -- the latter of which Moneygram counted as a customer as recently as last year before the retail giant started its own money-transfer business -- offer their own customers new options to move cash.
Now what: However, while Moneygram declined to comment, Western Union today issued a statement claiming the reports "are not accurate."
That seems to stop short of an outright denial, so it's unsurprising that shares of both Western Union and Moneygram closed significantly higher today. That said, even if Moneygram and Western Union are in talks for a potential acquisition, investors would be wise to avoid using it as an integral part of their investing thesis, as such purchases are never guaranteed. If I were a Moneygram shareholder, I would have no qualms with taking at least some of today's quick gains off the table.
