Vodafone Group Plc (Ticker: VOD) one-year price chart above (click image to enlarge)
Vodafone Group Plc, UK based global telecom provider shares continued its vertical climb to rise an additional 4% today to close at $29.40. The price move is on heels of an Financial Times article today that Verizon and AT&T are considering a $245 billion takeover bid for the company.
Not only would this takeover be the largest merger in corporate history, it would also represent a 40% premium on the current share price of Vodafone. There is no assurance that an agreement would be reached to consumate the merger, nor that it would be at the price rumoured.
The company shares have risen over 22% since February. Price momentum is very strong for Vodafone at this time. Shares will be driven by speculation of the anticipated merger. It is simply an investment on a deal or no deal.
SiAlpha has a WEAK POSITIVE signal with a potential upside of $7 to $10 per share (if Vodafone is acquired for $245 billion) vs a downside of $5 to $7 if no deal is completed. The risk to reward is below 1 but not below 0.5 for a strong positive rating.
Disclosure: We do not hold any position in Vodafone shares.