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Cano Health plunges 42% on report CVS has walked away from pursuit

Oct. 17, 2022 11:53 AM ETCano Health, Inc. (CANO), CVSCVS, HUMBy: Joshua Fineman, SA News Editor16 Comments

CVS Pharmacy in New York City

Lya_Cattel/iStock Unreleased via Getty Images

Cano Health (NYSE:CANO) plummeted 42% on a report that CVS Health (NYSE:CVS) has decided not purse an acquisition of Cano. CVS rose 1.7%.Cano has decided to walk away at this time, according to a

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Comments (16)

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$cano definitely not worth looking at
Equities Ghoul profile picture
@deadhead213 you’re life is definitely not worth looking at
Mktneutralhedger profile picture
Deal one day no deal the other day, well same with the market: +3% one day -3% the other day. Better to get some short-dated Treasuries for the next 6 months and sleep well at night.
Retail guys playing the risk arb game. Just go to Vegas. Better food and free drinks.
@The Real Cavalier except free drinks are slowly being phased out.
Biologics profile picture
I will be taking advantage of this.
@Biologics how do you see this playing out? I bought 2k shares today based on risk to reward, but have no idea how long I should hold this position. Any thoughts would be appreciated!
Boilermaker_KK profile picture
This deal was likely never to occur. CVS is working to close the Signify deal and likely didn’t have the bandwidth to do two deals simultaneously and no to mention that the market did NOt like it. See shareholder comments here.

CVS should focus on Signify deal, operational improvements, debt paydown, stock buybacks and continued dividend increases.

I exited CVS position incrementally and completely north of $100 per share.

I’m playing the merger arb of CANO. Other interested parties. CVS couldn’t get comfortable with the desired price undoubtedly because, remember, Human has right of 1st refusal on any acquisition so that always makes a merger / buyout trickier and priced to perfection (or at least closer to it).

Other players will likely emerge - possible United Health, … or perhaps Humana just pulls the trigger and takes CANO out. Time will tell. One thing we know for sure, it won’t be CVS. But deal likely gets down, this space remains ripe for consolidation and many large CANO shareholders are eager to strategically exit.
Wasn't CANO a $6 + stock prior to this...
So are those shareholders who “walked away” from the stock and caused the price to drop more than $10 on the original news going to come back?? Haha
Good. Was too expensive.
Good, many better healthcare companies to buy than this.
Great! Just what we did not need another acquisition which I would guess we would be overpaying for. There are enough operational issues that management needs to focus on with the current businesses.
@Kjmjuice agree 100%...glad they walked.
Too big to chew, smaller bites would be better, this one could have caused choking, the Heimlich maneuver (abdominal thrust) doesn't work on companies.

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