Could Buyout Buzz Carry Furmanite Corporation (FRM) to Double Digits?

Furmanite Corporation (FRM) is surging on a buyout bid

by Alex Eppstein

Published on May 4, 2015 at 10:51 AM

Furmanite Corporation (NYSE:FRM) is cruising higher this morning, following a buyout offer that could represent a "substantial premium" to the current price. The bull gap has optimistic options traders champing at the bit, with 367 calls already on the tape -- compared to a typical intraday volume of one call.

Buy-to-open activity has been detected at FRM's May and June 10 calls, which are the equity's two most active strikes. By initiating these out-of-the-money positions, the speculators anticipate the shares will run into double-digit territory by the respective expiration dates -- at the close on Friday, May 15, and Friday, June 19.

At last check, Furmanite Corporation (NYSE:FRM) was 22.4% higher at $8.85, bringing it into positive year-to-date territory -- and helping the stock break out of congestion in the $8-$8.40 range. Short-covering activity could be helping to fuel these gains, as it would take nearly nine sessions to buy back all of the shorted shares, at FRM's average daily volume.

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