AOL Shares Popped: 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 AOL (NYS: AOL) have popped today, up by as much as much as 10.5%, before settling down to a healthy 6.5% gain for the day on renewed speculation of hooking up with Yahoo! (NAS: YHOO) .
So what: Last night, Reuters reported that AOL CEO Tim Armstrong was pitching the prospect to a handful of "top shareholders," claiming that the combined company could realize between $1 billion and $1.5 billion in cost savings and synergies related to overlapping data centers and news sites. Armstrong also maintains that the combined company could pull more weight with ad agencies.
Now what: The report also describes how Armstrong may just be looking for an exit strategy, since he has failed to turn around the company since taking over in 2009. However, he has expressed interest in managing the combined company despite AOL's recent underperformance. Armstrong's persistence may end up paying off this time; he might have gotten his timing right. After all, Yahoo! Is in the market for a new CEO.
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At the time this article was published Fool contributorEvan Niuholds no position in any company mentioned. Check out hisholdings and a short bio. The Motley Fool owns, andMotley Fool newsletter serviceshave recommended buying, shares of Yahoo! Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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