MedAssets Shares Surged: 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 hospital software provider MedAssets (NAS: MDAS) are soaring 18% today on rumors that the company may be looking to explore leveraged buyout opportunities.

So what: I wouldn't quantify this as anything more than a rumor right now until we hear from MedAssets itself; but according to a report from DealReporter, MedAssets has hired JPMorgan Chase to help it explore a possible leveraged buyout.

Now what: Here's the real question of the day: Who is doing the buying if that's the case? MedAssets has a fair amount of debt relative to cash, so I feel it looks more like a buyout candidate than a purchasing party. This is why it's dangerous to play rumors; we simply don't have all of the facts. In November I identified MedAssets as an intriguing, fast-growing company that was having trouble corralling its spending. I still see the company as intriguing, but I'd hold off on making a move until we have more clarity from the company as to what's really going on.

Craving more input? Start by adding MedAssets to your free and personalized watchlist so you can keep up on the latest news with the company.

At the time thisarticle was published Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong. The Motley Fool owns shares of JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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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