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Harris Value Trumps Merger (HRS)

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By Douglas A. McIntyre Updated Published
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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

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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