Mega Deals are Signs of Weakness
[?]
Submitted by Ethanol Blog
Although mega deals are usually good for stock market sector pricing, they aren’t typically positive for sector economics unless you have a dumb seller and dumb buyer. As one of my associates at Lehman Brothers once said, “The Acquirer wants the Acquiree at a low price and the acquiree usually trades at a low price because of sector economics.” Now enter the institutional investor who loves to bet on sector consolidation in which we are now seeing in the ethanol sector. Expect a move upward for ethanol stocks.
