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Why DigitalGlobe, Inc. Stock Popped Today

Imagery from DigitalGlobe's various satellites.

What happened

Shares of DigitalGlobe Inc. (NYSE: DGI) climbed 18.2% Friday following reports the satellite-image purveyor is in talks to be acquired.

So what

According to a report (may require subscription) from The Wall Street Journal this afternoon, which cited "people familiar with the matter," DigitalGlobe has fielded interest from a "number of possible buyers." But now, the sources say, the company is in "advanced talks" to sell itself to Canadian satellite company MacDonald Dettwiler & Associates.

Imagery from DigitalGlobe's various satellites.

Imagery from DigitalGlobe's various satellites. IMAGE SOURCE: DigitalGlobe.

Now what

These talks do not guarantee a deal will come to fruition, and the exact terms between MacDonald Dettwiler and DigitalGlobe are unclear. But with DigitalGlobe's unaffected market capitalization sitting around $1.8 billion, industry watchers speculate the buyout could be worth as much as $2 billion to $3 billion.

In the meantime, DigitalGlobe is scheduled to report fourth-quarter 2016 results on Monday, Feb. 27, 2017. If an agreement isn't reached before then -- and given the magnitude of today's pop -- you can bet investors will be listening closely for any additional clarity on the situation at that time.

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Steve Symington has no position in any stocks mentioned. The Motley Fool recommends DigitalGlobe. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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