Enthusiasm for interest rate cuts is fueling the roaring stock markets. Without cutting rates last week, the Fed’s intent to do so pushed markets to extreme bullishness. This enables market players to spin rumors.
Investors need to watch out for buyout rumors that do not come true.
DocuSign (DOCU), an electronic document service provider, is reportedly exploring a buyout deal. Last Friday, the Wall Street Journal reported interest is in the early stages. The paper cited people familiar with the matter.
DocuSign does not have a moat. Toronto’s real estate system offers at least four other e-signing options.
Farfetch (FTCH), a UK-based luxury retailer, is seeing its stock in freefall. Rumors circulated that Richemont would buy it. The firm later denied it on Nov. 29. On Dec. 1, Point72 Asset Management bought a 5.1% passive stake.
On Dec. 13, reports circulated that Apollo Global would provide emergency funding. On Dec. 15, FTCH closed at 64 cents, down 13.26%, on a report it was trying to secure a last-minute deal.
In the fintech sector, Shift4 Payments (FOUR) traded close to a 52-week high. Rumors circulated that Global Payments would buy it. Global said it was not in talks to buy the company. The next day, analysts said the stock had a buyout price of $90-$100.
