Why Is FCStone Trading Above Its Takeover Price?

Includes: FCSX, IAAC
by: Stone Fox Capital

After closing up 8% today following a nearly 10% gain Thursday, FCStone (FCSX) is trading at $5.59 which is above the $5.25 price of the takover offer from International Assets (NASDAQ:IAAC) (.295 shares at $17.8). Somebody clearly thinks another bidder is lurking. While this could be good short term for the FCSX stock, I'm not sure it would be all that great long term. Any new bidder is likely much larger and would dilute the shareholder much more in the new structure. The current offer, while not that exciting to existing shareholders from a premium, at least offered continued participation in a dynamic, growing company. One with better capitilzation to help grow the FCSX client base.

Monday could be interesting. My best hope is that IAAC has to up its offer.

Disclosure: Long FCSX