Why VeriFone Systems Popped

Before you go, we thought you'd like these...
Before you go close icon

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 VeriFone Systems (NYS: PAY) popped today by as much as 12% after the company landed a big contract and its CEO made an insider purchase.

So what: The credit card terminal maker scored a deal to install payment systems in roughly 6,500 taxis in Washington, D.C., worth upwards of $35 million. The contract spans five years, and VeriFone will also provide trip reporting and bolster its media presence in the vehicles. It could also see additional advertising revenue from the deal that could bring its total value up to $45 million. CEO Douglas Bergeron also filed a Form 4 disclosing that he made an outright purchase of shares last week of 155,000 shares.


Now what: The average purchase price was approximately $32.50, bringing his total cost up to just over $5 million in a vote of confidence in the company. The insider purchase is probably more important here, as a $35 million contract over five years doesn't seem too exciting alone when you look at the $472 million in revenue the company brought in last quarter alone. Bergeron's purchase was a substantial increase in his total holdings.

Interested in more info on VeriFone Systems? Add it to yourWatchlist.

At the time this article was published Fool contributorEvan Niuholds no position in any company mentioned. Check out hisholdings and a short bio. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days. The Motley Fool has adisclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners