After enjoying last year’s strong returns, investors need to be wary of the proverbial pump-and-dump schemes. Media hypes an idea or stock in a pump. They do not limit this to penny and small-cap stocks. When companies or facts later run counter to the rumors, the stock falls sharply.
Is a pump brewing for iRobot, DocuSign, and multi-state cannabis operators?
In November 2023, a media outlet reported that Amazon’s (AMZN) proposed purchase of iRobot (IRBT), a robotic vacuum supplier, would win the European Union’s approval. Shortly after, the EU demanded more details on the deal. The news worsened on Jan. 10 with a report that Amazon would not concede to Europe’s anti-trust operators.
As of the time of writing, DocuSign is reportedly attracting two private equity firms. Blackstone (BX) dropped out. The electronic signing firm does not have a moat. As competition rises, DocuSign needs to find a buyer.
Hewlett Packard Enterprise (HPE) confirmed that it is acquiring Juniper (JNPR) for $14 billion or around $40 a share. JNPR stock closed at $37.51 last week, giving investors another $2.49 in upside.
MSOs continue to wait for the Federal government to legalize cannabis. Markets waited for at least four years for this, only to find disappointment. Now, the sector needs drug regulators to re-classify cannabis.
