The company is considering re-joining Madison Square Garden Entertainment
The shares of MSG Networks Inc (NYSE:MSGN) are up 6.9% to trade at $20.45 at last check, after Bloomberg reported the company is considering merging with Madison Square Garden Entertainment (MSGE). The deal would reverse a prior split, as MSG spun off of Madison Square Garden just last year.
Today's pop has MSGN nearing its recent March 8 annual high of $20.90. Now up 29.8% year-to-date, the stock has overcome pressure at both the $15 and $18 levels. If yesterday's pullback was any indicator, the equity is turning former pressure at the $19 level into support as well.
Despite the positive price action, five of the six analysts in coverage carry a "hold" or worse rating on MSN Networks stock. Plus, the 12-month consensus price target of $15.33 is a 19.9% discount to last night's close. Should some of this pessimism begin to unwind, MSGN could be pushed even higher.
Though shorts have been jumping ship, there is still plenty of room for retreat. Short interest is down 24.7% during the last two reporting periods, but still represents a solid 15.3% of the stock's available float. In other words, it would take over 10 days to cover at MSGN's average pace of trading.