The Buzz

All markets and investing news all the time

The Adele market: Rumor has it

August 16, 2012: 10:55 AM ET

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.

Join the Conversation
Fear & Greed
Sponsored by
About This Author
Paul Lamonica
Paul R. La Monica
Assistant Managing Editor, CNNMoney

Paul R. La Monica is an assistant managing editor at CNNMoney. He is the author of the site's daily column, The Buzz, and also tweets throughout the day about the markets and economy @LaMonicaBuzz. La Monica also oversees the site's economic, markets and technology coverage.

To view my watchlist

Not a member yet?

Sign up now for a free account
Stupid Stock Move of the Day
#StupidStock Move of the Day! Yes, Urban Outfitters may be finally turnings things around. But $URBN up 17%? Seems a bit excessive, no?
Most Popular
Powered by VIP.