Wall Street Loves ComScore's Plan to Acquire Rentrak
"The two research companies will undoubtedly continue to grow, but not necessarily at Nielsen's expense."
Investors on Wednesday gave a huge thumbs-up to the proposed merger of audience-measurement companies ComScore and Rentrak.
Not only did shares of Rentrak — the smaller company that is to be acquired in the deal — surge 25 percent on Tuesday, but shares of ComScore rose more than 11 percent.
ComScore said on Tuesday it would purchase Rentrak in a stock-for-stock transaction expected to close next year. The two companies together would presumably represent a bigger challenge to Nielsen than they do now as separate entities.
Indeed, while shares of Rentrak and ComScore shot higher on Wednesday, shares of Nielsen fell 2 percent, even on a day when the broader markets rallied, with the Dow Jones Industrial Average up 236 points.
While investors were selling shares of Nielsen, at least one Wall Street analyst was defending the stock on Wednesday.
"The two research companies will undoubtedly continue to grow, but not necessarily at Nielsen's expense," said Brian Wieser of Pivotal Research Group said of ComScore-Rentrak. "Media owners will continue to rely on Nielsen for data services."
After Wednesday's busy day for traders of all three stocks, Rentrak's market capitalization leapt to $830 million from $666 million on Tuesday. ComScore's market cap jumped to $1.8 billion from $1.6 billion and Nielsen's fell to $16.3 billion from $16.6 billion.