Deals, Deals, Deals
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In the big picture ISDEX rises 7.67 points or 1.39% to 559.09 on the heels of a NASDAQ record-setting move. The real news is deals, deals, everywhere deals drive valuations more and more as consolidation fever takes hold.
Today's dance fever includes ONSALE (NASDAQ:ONSL) agreeing to acquire rival Egghead (NASDAQLEGGS) in a stock swap, Terms: ONSL will issue .565 shares on common for each EGGS common.
Pro forma each firm will own roughly half the new larger auction and etailer effort. Reason for the marriage? the two etailers need to bulk up to fight the war on three fronts: 1) sales (combined will be about $500m); 2) brand (forward going will be known as Egghead.com); 3) Amazon is moving into tech products as are others.
While both ONSL and EGGS stocks dropped today I think the merger makes sense based on the 3 above items.
Ironically, the deal may have boosted shares of etailer Cyberian Outpost (NASDAQ:COOL), which pops 14% to $11 7/8 per share on expectations of deal fever finding it soon.
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