Fast Money: Behind the Money
RSS FEED
RECENT POSTS
- Your First Move For Friday February 10th
- Home Builder Optimism Up, Industry Expert Says
- Chart Patterns Suggest Pullback at Hand
- UPDATE: Massive Trend Just Getting Underway in Financial Services: Finerman
- Terranova: Beware Nuance Play On Apple Spike
- Mortgage Settlement Could Buoy BofA Most: Traders
- Mark Mahaney Talks Akamai, Groupon, Yahoo ...
- iPad 3, iTV and iPhone 5 Should Drive Apple to $665: Money Pros
FAST MONEY FEATURES
FAST MONEY POLLGet in the post game. Respond to our "Question of the Day" right now.
TRADE SCHOOLGrab a pencil because school is in session and the Fast Money traders are teaching class.
FAST MONEY PODCASTSDownload Fast Money onto your MP3 Player.
FAST MONEY WIDGETGrab this all-in-one application and get recaps of the show sent right to your desktop or blog.
SHOP FOR FAST MONEY MERCHANDISEGet your game on with Fast Money gear.
FAST MONEY PHOTOS!Check out our scrapbook. These "pix" are guaranteed winners.
NEWSLETTERSign up and receive a daily email from the Fast Money team!
FAST MONEY MOBILE ALERTSGet advanced information about the next Fast Money.
Traders Floating Rumors Like ‘Chum in the Water’
Text Size 
Executive Producer, Fast Money & Strategy Session
 |
The takeover chatter in the marketplace has reached a fever pitch as some unscrupulous traders prey on investors desperately searching for returns in an environment where merger activity is picking up as companies deploy the record cash on their books.
“It’s been an easy environment for some traders to get rumors started due to the acceleration of activity,” said Pete Najarian, founder of OptionsMonster.com and a ‘Fast Money’ trader. “It’s like chum in the water.”
| ||
At least six stocks were moving higher today because of takeover speculation, according to market intelligence site theflyonthewall.com. Companies with buyout offers on the table, such as Potash [POT
Loading...
()
] and ZymoGenetics [ZGEN
Loading...
()
], traded above their current offer prices on speculation another buyer would step in or that a higher bid was coming from the same buyer.
“When you have a 10-year rate of approximately 2.6 percent, you are starting to see speculators take a portion of their portfolio and play news or takeover stocks in the hope that one quick hit can make an incredible amount percentage wise and beat The Street,” said Joe Kinahan, chief derivatives strategist for TD Ameritrade’s Thinkorswim. “This type of strategy is fraught with problems over time and tough to be really good at.”
M&A activity is certainly picking up, with a $130 a share bid on the table by BHP Billiton [BHP
Loading...
()
] for fertilizer maker Potash [POT
Loading...
()
], and just last night, a $9.75 offer by Bristol-Myers [BMY
Loading...
()
] for biotech ZymoGenetics. After all, companies have a record amount of cash on their books relative to assets and they have to do something with it. But with the actual deals, come the rumors.
In one of the more egregious examples Wednesday, the New York Times [NYT
Loading...
()
] jumped on speculation they would be taken over by billionaire Carlos Slim. This has been one of the more common rumors to float since Slim increased his stake in the company to 14 percent last May. A Slim spokesman denied the speculation to Bloomberg News and the shares retreated after their morning pop.
“The speculation is out of control and this will end badly with all else held constant,” said Michael Block, chief equities strategist for Phoenix Partners Group.
For the best market insight, catch 'Fast Money' each night at 5pm ET, and the ‘Halftime Report’ each afternoon at 12:30 ET on CNBC.
John Melloy is the Executive Producer of Fast Money. Before joining CNBC, he was an editor for Bloomberg News, overseeing the U.S. Stock Market coverage team.______________________________________________________
Got something to say? Send us an e-mail at and your comment might be posted on the Rapid Recap! If you'd prefer to make a comment, but not have it published on our Web site, send your message to .
Data is a real-time snapshot *Data is delayed at least 15 minutes
