(List compiled by Becca Lipman)
It's hard to measure a moving target. As the Dow erratically dips and rises market values become a seemingly arbitrary number from one day to the next. This yo-yo-ing has had adverse effects on M&A and IPO hopefuls.
Market value (or rather, enterprise value) is a key data point in determining the cost of a company. While the numbers remain unstable many companies who were undergoing takeovers are having a hard time coming to an agreement.
The disputes are already underway. "Last week, Houston-based toolmaker Cooper Industries Plc abandoned a bid for Laird Plc, the maker of electronic shields for laptops, after failing to agree on price. Fidelity National Information Services Inc. followed suit, backing away from an offer for U.K.-based financial-software maker Misys Plc." (via Bloomberg)
Bloomberg further points out that at least six IPOs have been postponed or canceled since the market began its dive.
To help you get a view on how M&As may be affected by the recent market plunge, we list below some takeover targets that have seen their value drop significantly this week. Do you think these takeover targets will find a buyer?
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1. Energy XXI (Bermuda) Limited (EXXI): Oil & Gas Equipment & Services Industry. Market cap of $1.80B. 0This is a risky stock that is significantly more volatile than the overall market (beta = 2.32). The stock is a short squeeze candidate, with a short float at 8.46% (equivalent to 6.43 days of average volume). The stock is currently stuck in a downtrend, trading -25.62% below its SMA20, -25.72% below its SMA50, and -22.12% below its SMA200.
It's been a rough couple of days for the stock, losing 25.52% over the last week. “Analysts see earnings estimates for EXXI jumping from 64 cents to $2.25 in 2012, as new wells come into play and rising energy prices boost profit margins. Also, this company should benefit as waiting times and regulations for drilling permits in the Gulf of Mexico improve.” (Via Seeking Alpha)
2. Internap Network Services Corp. (INAP): Internet Software & Services Industry. Market cap of $271.43M. 0The stock is currently stuck in a downtrend, trading -20.56% below its SMA20, -28.62% below its SMA50, and -24.57% below its SMA200.
It's been a rough couple of days for the stock, losing 10.84% over the last week. “InterNap was a favored takeover target. However, the firm appears to have since lost its luster.” According to Seking Alpha’s Ben Kolada. “Investors are becoming increasingly frustrated with its poor performance, particularly after first quarter total revenue declined 6% year over year. And shareholders once again fear the worst – in the past month, shares of InterNap have lost more than one-tenth of their value.”
3. Range Resources Corporation (RRC): Independent Oil & Gas Industry. Market cap of $9.10B. The stock is a short squeeze candidate, with a short float at 8.11% (equivalent to 5.4 days of average volume).
The stock has had a rough couple of days, losing 12.51% over the last week. This company has been pegged as a “this year’s top 19 takeover candidate” by Morningstar. “RRC might be an interesting target for a major oil or natural gas company. These shares have been considered to be a buyout target by many.” (Via Seeking Alpha)
4. Weatherford International Ltd. (WFT): Oil & Gas Equipment & Services Industry. Market cap of $12.63B. The stock is currently stuck in a downtrend, trading -16.33% below its SMA20, -12.75% below its SMA50, and -20.74% below its SMA200.
It's been a rough couple of days for the stock, losing 19.13% over the last week. Weatherford is a leading provider of equipment and services to the oil and gas industry, based in Switzerland The stock opened at $18.17/share on Monday, and currently trading around $16.16/share (an 11.06% drop). According to Daniel Miller, who heads Gabelli's Focus Five investment team, “Its products in the $13 billion directional drilling service business provides growth opportunities that make it an attractive acquisition target for a larger energy oil-and-gas service company." (Via Daily Finance)
5. Yahoo! Inc. (YHOO): Internet Information Providers Industry. Market cap of $15.75B. The stock is currently stuck in a downtrend, trading -10.72% below its SMA20, -17.67% below its SMA50, and -25.88% below its SMA200.
It's been a rough couple of days for the stock, losing 5.25% over the last week. In the last week Yahoo has dropped According to Bloomberg (via Business Insider), Yahoo is essentially a free acquisition right now. Its stock has dipped below its 52-week low, and at $11.90 per share and a market cap of $15.5B, the company is worth less than its assets and cash which add up to $18/share. “If a company were to offer a 63% premium they'd get Yahoo's core business for nothing.” Ouch.