Shares of Coinstar and Electronic Arts Surge on Takeover Rumors
Shares of Electronic Arts and Coinstar were climbing on Thursday as rumors spread that they are both takeover targets of private-equity investors.
Coinstar stock was up as mucn as 10 percent on Thursday after the New York Post reported that the coin-counting company, which is also the parent of Redbox, has been in discussions with an undisclosed private-equity firm for several months.
The Post reported that Coinstar, which operates 35,000 Redbox DVD kiosks, is also expanding its coffee-selling and photo-printing initiatives. Redbox is also in league with Verizon for a streaming service that will compete with Netflix and Amazon.com.
Redbox’s business has been climbing steadily at the expense of video-rental stores that can’t seem to stay in business, but Coinstar still managed to disappoint Wall Street with its quarterly earnings last month, sending shares down.
In mid-day trading on Thursday, though, Coinstar shares were as high as $53.21 after closing Wednesday at $48.22. The company’s market capitalization exceeded $1.6 billion on Thursday.
As for Electronic Arts, the maker of video games saw its stock also jump 10 percent on reports it was mulling a sale to private investors, though the stock quickly halved its gains on the day. In midday trading, shares of Electronic Arts were at $13.80 after closing Wednesday at $13.02. The company's market cap exceeded $4 billion.