When a stock gets jerked around in either direction, it’s often tricky to divine exactly what investors are thinking — especially lately, when the U.S. debt ceiling crisis has financial markets set on a hair trigger.
Markets opened up sharply this morning on expectations that a compromise on the debt ceiling is finally at hand. But shares in realtor.com operator Move Inc. started out in the other direction, briefly falling 12 percent from yesterday’s closing price of $17.51.
Since Move happened to announce its latest acquisition (of FiveStreet Inc.) this morning, it’s natural to assume that the drop in share price had something to do with the acquisition. That’s what Steve Symington has done on Motley Fool, concluding that today’s volatility “appears to be more a knee-jerk reaction to the uncertain acquisition terms.”
But Move would have been required to disclose the acquisition terms in a regulatory filing if they would have a material impact on results. Since Move made no such disclosure today, it’s unlikely that the company shelled out a huge sum for the 2-year-old startup, or that the acquisition will be a significant source of new revenue, at least for now.
Whatever the cause of the volatility, shares in Move have since joined today’s market rally, and were up more than 2 percent in early afternoon trading. Source: fool.com
