Why Hydrofarm Holdings Stock Jumped 11% Today
Shares of hydroponics supplier Hydrofarm Holdings (NASDAQ: HYFM) were higher by roughly 11% at 2:30 p.m. EDT today. It was just a couple of days ago that the stock sold off sharply on news of an acquisition. But it appears that investors are already starting to look to the future.
Very often in an acquisition situation the price of the acquiring company falls. That makes complete sense, given that it has to pay for the deal. In the case of Hydrofarm, part of the up to $78.1 million price tag (there are earn outs involved) for nutrient maker Field 16 was going to be covered by selling stock. That's another thing investors often frown upon, since stock sales are dilutive to current shareholders.
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Source Fool.com
