Commercial Metals Shares Jumped: What You Need to Know
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 Commercial Metals (NYS: CMC) jumped 22% today when famous investor Carl Icahn made an offer to buy the company.
So what: Icahn, who already owns 10% of the company, is offering $15 per share for the 90% he doesn't already own. The total deal would be for $1.73 billion, and it is thought he would combine parts of the company with a metals recycling business he owns.
Now what: Icahn said he doesn't have any confidence in the board or current management and would like to improve operations and change the company's direction. A move like this from Icahn is huge news for investors, but it doesn't necessarily mean his bid will be successful. There is still about $1 in upside if the current offer is accepted, but I would take part of my profits off the table on the chance that a deal isn't completed.
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At the time this article was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.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.
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