Lululemon Athletica Inc. (NASDAQ: LULU) was off to a relatively rough start in the trading session this morning, spending the first half hour or so in the red. However, rumors recently broke, exciting investors and pushing the stock to the green. Of course, our partners at Trade Ideas were the first to alert us to the gains. At the moment (10:03), LULU is trading at $60.21 per share after a gain of $0.28 per share or 0.47% thus far today.
LULU Gains On LBO Chatter
As mentioned above, Lululemon Athletica wasn’t off to the best of days in the market today, spending the first half hour of the session in the red. Nonetheless, minutes ago, rumors broke that seem to have excited investors. Those rumors suggested that LULU will be the target of a leveraged buyout. As with most rumors, this one is overwhelmingly vague. There has been no insinuation of who may be the buyer, nor at what price.
This brings us to an important key point. The reality is that buyout rumors happen almost daily in the market, if not multiple times per day. However, very few of these rumors ever prove to be valid. In this particular, case, chances are slim. Considering how vague the rumor is, and the fact that it originated on social media, it’s not likely that the buyout will take place. So, if you’re going to trade on this run, please be sure to do so with caution.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will be keeping a close eye on LULU. In particular, we’re interested in seeing if the leveraged buyout rumors have any validity to them. While we don’t believe this to be the case, anything can happen in the market. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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