Today, Webex was bought out by Cisco Systems (CSCO) for $3.2billion.
The news sent Webex’s stock soaring 22.03% to close at $56.38.
With a healthy 144% gain, WEBX will have to be our first sell since there’s likely to be little or no benefit in staying in past the eventual closure of the Cisco deal.
Once again, this demonstrates the value of looking for small to mid-cap stocks trading below intrinsic value that have plenty of cash (relatively speaking). More often than not they become buyout targets, because the cash can be used to partially fund the buyout.