Yum China Holdings Inc (NYSE: YUMC) is having an overwhelmingly strong start to the trading session thsi morning after the company found itself in the center of takeover chatter. Of course, the idea of an acquisition is leading to excitement among investors and sending the stock screaming for the top. Today, we’ll talk about:
- The takeover chatter;
- what we’re seeing from YUCM as a result; and
- what we’ll be watching for ahead.
YUMC Flies On Takeover Chatter
As mentioned above, Yum China is flying early on this morning as takeover chatter breaks. In various reports, we’re seeing stories surrounding the idea that Hillhouse Capital and KKR & Co., are two of the firms that are considering an acquisition of YUMC. According to the reports, they potential buyers are speaking with banks surrounding the potential opportunity.
While the chatter is coming from some seriously trusted resources, YUMC hasn’t confirmed that any offer has been made. At the end of the day, these rumors, along with all rumors should be treated with caution. The truth of the matter is that takeover chatter is one of the most common forms of market manipulation. So, if you’re considering buying on this news, please make sure to do so with caution.
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn is that the news moves the market. In the case of Yum China, the news proved to be positive, or at least the chatter did. While there is no real news surrounding the company, the prospect of an acquisition on the horizons means that investors may see a strong return of value relatively soon. So, it’s no surprise that the story is leading to excitement and sending the stock toward the top. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:09), YUMC is trading at $39.95 per share after a gain of $4.16 per share or 11.62% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on YUMC. In particular, we’re interested in following the story surrounding a potential acquisition. While one hasn’t been announced yet, if these reports are right, it could be coming soon. Nonetheless, we’ll continue to follow the news closely and bring it to you as it breaks!
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