These four stocks are seeing a lot of action this week as company news releases have been the catalysts to increased trader interest and trading volume.
Harbin Electric (HRBN) – This has been the most controversial of the four. Monday morning the Chinese company announced that it is being acquired for $24 per share in cash by a group led by the CEO. The $24 price was a premium of 186% to the stock’s close on Friday. Despite the announcement of an offer at $24, the stock was only able to close at $13.35 on Monday. On Tuesday, the stock rose 9.7% and closed at $14.64. The stock still has another 64% to go if this merger is actually going to close. There has been some speculation that traders are having doubts about the validity of this merger agreement as well as skepticism on the financing. Note, the two groups that are acquiring the company have secured debt financing from China Development Bank Corporation Hong Kong Branch and affiliates of Abax Global Capital. In addition, Abax has issued an equity commitment letter committing certain funds and/or entities it manages or advises to provide additional equity financing.
China Gerui Advanced Materials (CHOP) – On Tuesday, Gerui rose 7.4% after it announced that as of June 20, 2011, the company repurchased 780,273 ordinary shares at an average price of $3.82 per share for a total share repurchase to date of approximately $2.98 million. Gerui also added that if the price of its shares remains at or around the current market price level, the company plans to continue to buy back its shares. The stock has had a tough 2011, down nearly 50% year to date. At the end of Q1, the company had roughly $5.25 in cash per share and $1.80 in cash per share after subtracting all liabilities. The stock closed Tuesday at $3.18.
DragonWave (DRWI) – The Canadian stock has been hot over the past two days, rising nearly 19% after its announcement of a partnership over the weekend. The company and BTI Systems will team together to create an integrated solution to deliver cost-effective, scalable capacity across metro fiber networks. BTI Systems will resell and integrate DragonWave's Fusion portfolio of circuit-over-packet and multi-service access products into the BTI Systems portfolio. By combining the DragonWave Fusion portfolio with BTI Systems' portfolio of packet optical and service delivery solutions for metropolitan networks, BTI Systems is delivering a complete All-Packet Mobile Backhaul network solution that scales to meet the capacity, redundancy, and SLA requirements for backhaul of mobile broadband. Up until the announcement, the stock was down more than 40% year to date.
Express-1 Expedited Solutions (XPO) – The stock rose over 16% on 6/22 after the company announced that Bradley S. Jacobs and minority co-investors will invest an aggregate of up to $150 million in cash in Express-1, including an investment by Jacobs Private Equity of up to $135 million, in each case including amounts payable upon exercise of a warrant. Jacobs will become the majority shareholder in Express-1 and chairman of its board of directors. In addition, he will lead the company as chief executive officer. Jacobs has a fine reputation and investors have a reason to get excited about him. He previously built two multi-billion dollar, publicly traded companies: United Rentals (URI), the world's largest equipment rental company, and United Waste Systems, the fifth largest solid waste company in the United States at the time of its sale.