Shares of Coinstar and Electronic Arts Surge on Takeover Rumors
The parent of Redbox is also expanding its coffee and photo-printing businesses.
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.