WebMD Health Corp. (NASDAQ: WBMD)
WebMD is having a great day in the market today after rumors surfaced that there may be an acquisition coming down the line. After all, there are few things that move the value of stocks like the concept of an acquistion. Today, we’ll talk about where these rumors came from, who might acquire the company, whether or not investors should bank on the possibility of an acquisition, how the market reacted to the news, and what we can expect to see from WBMD moving forward.
WBMD Is Rumored To Be Looking To Be Acquired
Recently, Financial Times reported that WebMD is looking to sell part or all of its business. WBMD is focused on providing healthcare information with regard to various illnesses to its customers through its online platform. According to the information released by Financial Times, the company is rumored to be in talks with several potential buyers.
Who Might Acquire WebMD?
While the company is rumored to be in talks with several potential buyers, the rumors specifically state that two of these potential buyers are Walgreens and United Health. Both of these companies would make sense as potential buyers of WBMD. After all, both Walgreens and United Health are part of the healthcare system and have quite a bit to add to the services provided by WebMD. Not to mention the marketing opportunities an acquisition would offer to either of these companies.
However, if I had to pick which was more likely to purchase WBMD, I would have to pick Walgreens. That’s because Walgreens has worked with WebMD on quite a few initiatives. One of the most successful of these partnerships has been the virtual wellness-coaching program (a smartphone app).
Can Investors Bank On An Acquisition?
While the concept of either Walgreens or United Health purchasing WBMD is clear cut, it’s not something that I would personally bank on. After all, the news is a rumor, and rumors are very often proven wrong. In fact, a source close to the WBMD acquisition plans says that there is also a chance the company may choose to do nothing, avoiding being acquired all together. The bottom line is that yes, an acquisition would be great. However, it’s always a bad idea to act on assumptions and rumors – that’s how investors lose money in the market!
How WBMD Is Reacting To The News
As mentioned above, WBMD is having an incredible day in the market today following the acquisition rumors. Currently (10:43), the stock is trading at $56.90 per share after a gain of 6.93% so far today.
What We Can Expect To See From WBMD Moving Forward
Moving forward, I have two conflicting opinions of what we can expect to see. It all depends on how far forward you would like to look. First off, in the short run, I’m expecting to see downward movement as the stock falls from highs generated from the rumors. Until the rumors of an acquisition are confirmed, WBMD isn’t likely to hold such large gains. However, in the long run, I have a very bullish opinion of WBMD, regardless of whether or not an acquisition actually happens. Ultimately, the company owns the most popular website for providing medical advice to consumers, they have generated several apps to do the same, and the management team at WBMD is incredible. All in all, when we talk about WebMD, we’re talking about a great company that’s likely to see gains moving forward.
What Do You Think?
Where do you think WBMD is headed moving forward? Let us know your opinion in the comments below!