As Markets Rebound, This 1 Stock Could Start a Buyout Binge
The stock market has done a good job of recovering so far this week, and on Friday morning, it appeared that market indexes would continue their upward trajectory. The Federal Reserve is still aggressively fighting inflation by sending short-term interest rates higher, but the bond market has seemed to believe that recessionary pressures could come into play and limit the extent to which the Fed can tighten its monetary policy. As of 8:15 a.m. ET, futures on the Dow Jones Industrial Average (DJINDICES: ^DJI) had risen 200 points to 30,872. S&P 500 (SNPINDEX: ^GSPC) futures had gained 25 points to 3,825, and Nasdaq Composite (NASDAQINDEX: ^IXIC) futures had picked up 78 points to 11,816.
Declines in the tech stock universe have been far larger than what others have seen, and that has made many individual investors wary of putting money to work in the sector. However, institutional investors have had a lot more confidence in the long-term prospects for some innovative companies, and they're starting to go bottom-fishing in order to pick up potential bargains. The latest target appears to be Zendesk (NYSE: ZEN), but it might well not be the last, and investors in hard-hit companies should be prepared for a rash of similar buyout bids that could leave them feeling disappointed.
Shares of Zendesk had been up nearly 50% in premarket trading on Friday morning before dropping back to a 30% gain. The customer-service cloud software platform provider announced it had made an agreement to get taken private by a group of institutional investors.
Source Fool.com
