You know we've reached the sleepy summer doldrums when The New York Post moves not one, but two stocks on reports of vague takeover chatter.
The News Corp. (NWSA)-owned tabloid more famous for salacious front page headlines and Page Six celebrity gossip reported Thursday that gaming company Electronic Arts (EA) and Redbox parent company Coinstar (CSTR) were both possible targets for private equity firms. Shares of both stocks were up about 10% Thursday morning.
Would an LBO of either make sense? Sure, both generate a decent chunk of annuity-like businesses. EA has Madden and other sports franchises while Coinstar has its namesake change-counting kiosks. EA, like rivals Activision Blizzard (ATVI) and Take-Two Interactive (TTWO) has been struggling to find a way to adapt the new world of online gaming, a world where casual gaming companies like Zynga (ZNGA) have become increasingly popular -- although not incredibly profitable.
Coinstar has fared better as of late. But it still faces brutal competition from the likes of Netflix (NFLX) as well as Amazon (AMZN), Apple (AAPL) and Hulu in the world of streaming video. So while it wouldn't be a shock if either company is taken private, investors should remember that late summer is often the time where takeover scuttlebutt quickly surfaces and dies. Be forewarned so you don't get burned. For more on the rumor mill, watch today's Buzz video below.>
|U.S.: Wells Fargo illegally repossessed 413 servicemembers' cars|
|News outlets stand by their 'bogus' post-debate 'polls'|
|Home Depot pulls Scary Peeper Creeper from stores in Canada after complaints|
|Ferrari reveals fastest convertible ever, and a super-fast family car|
|Wells Fargo CEO John Stumpf grilling by Congress: Round 2|