Harris Corp. (NYSE: HRS) is seeing shares down 15% at $55.66 on almost 4-times average trading volume today. This is after the company said it wasn’t for sale after it was believed that offers were going to be made to the company. The truth is that offers may have been made or they might have been hinted at, but that doesn’t mean they would have been attractive offers.
Last week, we went cautious on a high volume alert at VOLUME SPIKE (Vsinvestor.com). While "reviewing offers" sounds good to most, we dug into this one and weren’t too excited over the high valuations and the size that the deal would have to see.
"Unfortunately for it, the bids are not said to be very high for the communications and IT company for government and commercial markets…..With a $8.8 Billion market cap, it doesn’t exactly fit the mold of “an easy deal” during the credit crunch and more selective private equity buyers."
Any rumors you see in companies with market caps this high and with valuations that high have to be taken with at least some skepticism for now. Even in our SPECIAL SITUATIONS letter we have had to revise almost every criteria for companies which may ultimately become acquisition targets.
Jon C. Ogg
June 2, 2008
Find a Qualified Financial Advisor (Sponsor)
Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.