Sports Retailer Surges on Sale to British Firm
The volatility just won’t stop: steep drops continue to presage impressive
Reports have emerged that South Korea will be exempted from proposed US steel and aluminum tariffs. Meanwhile, China and the US appear willing to enter negotiations to avoid a costly trade war. At this point, markets are wrestling with whether the recent upsurge in protectionism was mostly rhetorical. Mega-cap stocks are pulling indexes back up today, with Microsoft providing market-leading momentum to the day’s rally.
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This morning, news broke that JD Sports, a UK sports retailer, will purchase Finish Line, Inc., an Indianapolis-based sports retailer. Finish Line focuses on selling through retail points located in Macy’s Department stores. The acquisition will add a new and substantial US market presence for JD sports.
The deal is valued at over $550 million. A top UK competitor to JD Sports (Sports Direct) is the second largest shareholder in Finish Line, and the move is seen as partly defensive, snapping up a US retail presence before their rival can.
Investors piled into the stock upon the announcement, driving it up over 30% at the time of this writing. There continues to be significant churn in the retail sector, with the action driving a series of highly profitable retail plays for NQ users in recent weeks.
Remember, this is a struggling sector. But action—even downward—creates opportunities for news-based traders. As physical retailers come under increasing pressure from online sellers, “fat is being trimmed.” Even as many firms suffer from the stiff price competition, retailers that prove their ability to succeed in this environment quickly become investors darlings. The economy is booming, and retailers unable to generate sales growth in this environment may be doomed.
Keep checking the NewsQuantified blog for a small sample of the 1000’s of profitable plays available to our members every week.