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 Affymetrix, Macy's, and Sotheby's Jumped Today

By Dan Caplinger - Jan 11, 2016 at 9:40PM

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

Despite ongoing volatility in the market, these stocks all climbed. Find out why.


Image: Macy's.

Monday continued the stock market's recent volatility, with initial gains giving way to a substantial decline in the early afternoon before stocks roared back to post modest advances. The S&P gained less than two points and the Dow was up about a third of a percent, but the Nasdaq Composite was down slightly on the day. For Affymetrix ( AFFX.DL ), Macy's ( M -3.25% ), and Sotheby's ( BID ), Monday brought some much-needed relief in the form of much higher share prices for investors.

Affymetrix soared more than 50% on news after the market closed on Friday that Thermo Fisher Scientific ( TMO 1.36% ) would acquire the maker of cellular and genetic analysis products. Thermo Fisher's deal involves paying Affymetrix shareholders $14 per share in cash, and Affymetrix stock immediately responded by climbing to just a few cents below the $14 mark by the close of trading. Thermo Fisher sees the deal strengthening its position in the biosciences arena and will also help expand its scope to cover genetic analysis as well. For Affymetrix, the offer potentially ends a tough period on a high note, although those who bought the shares at much higher levels in the mid-2000s prior to the financial crisis will see the takeover as bittersweet. The parties expect the deal to close in the second quarter, assuming that Affymetrix shareholders approve the deal and that regulators sign off.

Macy's gained 8%. Activist investor and major shareholder Starboard Value outlined its proposed strategy to help the retailer unlock what it called "the enormous value intrinsic" of Macy's real-estate portfolio, having sent a letter to Macy's top executives and board of directors. Starboard believes that Macy's should use joint-venture structures for its mall-based and other real-estate properties, with the belief that the proposed structure will unlock about $10 billion in shareholder value while also reducing risk and improving the company's capital structure. By its estimate, Macy's stock could climb to $70 per share, or roughly double where it started the day. Shareholders aren't necessarily that optimistic about Macy's prospects, but the potential for ongoing activist participation has inspired some shareholders to expect further discussions to boost the stock price.

Finally, Sotheby's climbed 7% after announcing this morning that it had acquired art-advisory firm Art Agency Partners. Sotheby's CEO Tad Smith argued that the acquisition should help Sotheby's "improve our leadership position at the high end of the fine art market, bolstering our private sales capability, giving us new growth opportunities in advisory services, and reinforcing the client-first culture in all we do." With AAP's contacts, Sotheby's expects to enhance its relationship with important collectors worldwide, and it also hopes to branch into offering collectors advice on how best to manage their art holdings. Some market commentators view the move from Sotheby's as a gamble in its shift from the traditional auction business, but as financial institutions in the investment-banking world can attest, expanding Sotheby's scope to offer impartial advice as well as auction services is a natural move to broaden the business and open up new opportunities to profit.

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

Macy's, Inc. Stock Quote
Macy's, Inc.
M
$26.80 (-3.25%) $0.90
Affymetrix Inc. Stock Quote
Affymetrix Inc.
AFFX.DL
Thermo Fisher Scientific Inc. Stock Quote
Thermo Fisher Scientific Inc.
TMO
$636.11 (1.36%) $8.53
Sotheby's Stock Quote
Sotheby's
BID

*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
624%
 
S&P 500 Returns
141%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/04/2021.

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.