Why is Zale stock trading above $21 a share? | Dallas Morning News

Zale’s stock price tripled in the past year before it gained 41 percent on Feb. 19 when Signet Jewelers, the parent company of Kay and Jared, said it’s buying the Irving-based retailer.

A reader asked why Zale stock has been trading above $21 a share? It closed at $21.71 on Thursday and is trading around that today.

Signet Jewelers is paying $21 a share to buy Zale, so those additional cents aren’t really in the equation.

It could be that some investors are speculating that another buyer will surface and create a little bidding war for Zale.

I’m not sure how likely that is. It’s easy to look at Zale’s list of stockholders — including Golden Gate Capital which owns 25 percent — and see how the votes are probably there to approve the deal.

Signet and Zale announced their intentions on Feb. 19. The transaction is valued at $1.4 billion including stock and debt.

The other reason the stock may be trading higher is short covering. There may be some people out there who still need to buy shares to cover their bearish bets on Zale.

Zale’s investor relations office couldn’t help. “We can’t speculate about our stock price,” said Zale spokeswoman Roxane Barry.

This entry was posted in Retail by Maria Halkias. Bookmark the permalink.

Link:  

Why is Zale stock trading above $21 a share? | Dallas Morning News