Amazon purchased Whole Foods for $13.7 billion in cash
U.S. stocks are modestly lower this morning, as options expiration nears. Among specific names on the move today are government contractor Booz Allen Hamilton Holding Corporation (NYSE:BAH), optical solutions specialist Finisar Corporation (NASDAQ:FNSR), and organic grocer Whole Foods Market, Inc. (NASDAQ:WFM). Here's a quick look at what's moving shares of BAH, FNSR, and WFM.
DOJ Investigation Leaves Booz Allen Hamilton Stock Reeling
Booz Allen Hamilton stock is reeling today, down 20% to trade at $31.82, after a regulatory filing revealed the Department of Justice is investigating the consulting firm over questionable accounting and billing practices. Following today's massive bear gap, BAH stock is now down nearly 12% year-to-date, despite hitting an all-time high of $39.67 as recently as Wednesday.
Already this morning, bullish brokerage firms are starting to reconsider their stance on Booz Allen. Ahead of the DOJ probe revelation, 80% of analysts called the stock a "buy" or better, but Vertical Research and Raymond James have since downgraded BAH to "hold" and "market perform," respectively.
Finisar Stock Up After Reporting Earnings
Finisar stock is up 10% to trade at $28.29 today, erasing last night's post-close losses, despite a dismal earnings report. FNSR's adjusted profit arrived in line with expectations, but quarterly revenue fell short -- as did the firm's 2018 guidance.
It's been a volatile year for FNSR stock, which has ranged from a mid-February high of $36.41 to a year-to-date low of $21.53 on April 20. Today's bull gap propelled the stock above its 80-day moving average, which rejected a rally attempt earlier this month -- but FNSR is now challenging its overhead 200-day moving average, which served as support during the second half of March.
Meanwhile, analysts remain optimistic. All 10 brokerages covering FNSR stock rate it a "strong buy."
Amazon Deal Sends Whole Foods Stock Soaring
WFM stock got an unexpected boost today, after Amazon bought Whole Foods for $13.7 billion in cash, including the assumption of debt. The deal values WFM stock, which closed at $33.06 yesterday, at $42 per share. Trading was briefly halted in WFM earlier this morning, but the stock has currently rallied right up to the bid price, up 27% at $41.99 -- suggesting traders are confident in the AMZN deal.
Today's buyout bid likely caught Whole Foods bears off-guard. Despite a 14% decline during the past two reporting periods, short interest still accounts for nearly 10% of the equity's available float (or 7.4 times WFM's average daily trading volume).