Why XPO Logistics Shares Popped
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 XPO Logistics jumped 13% today after announcing an acquisition.
So what: The company will pay $365 million for logistics provider 3PD, consisting of $357 million in cash an $8 million in XPO restricted stock. Is will use its own cash and borrow $195 million from Credit Suisse Group for the remainder of the purchase.
Now what: Management said that the deal will "immediately and significantly" add to profits, which is good because XPO has had trouble making money lately. Over the past year it has reported $1.97 per share in losses, and analysts aren't expecting the company to be profitable until at least next year. This may push those expectations for profit forward, and that's why investors are cheering the move today.
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The article Why XPO Logistics Shares Popped originally appeared on Fool.com.
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