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BlackBerry - Suspicious Trades Around Buyout Rumors Provide Lesson For Investors

Two times in January, BlackBerry (BBRY) was the target of speculation that suggested Samsung (SSNLF) was interested in buying the struggling smartphone maker. Resurfacing rumors about a potential takeover offer from the South Korean tech company got investors all salivating over a potentially massive takeover premium. As a consequence, BlackBerry's stock went through the roof on both occasions, most notably on January 14, when BlackBerry's shares shot up 30% and actually marked a new 52-week high on the backs of the takeover rumors. Despite being long BlackBerry myself (see my disclosure in past articles), I have tried to caution investors and warned against acting on those rumors, which in the case of BlackBerry are resurfacing on a fairly regular basis.

The main reason why I am advising to be cautious in light of takeover offers is twofold: First, takeovers, if they are to occur, will most definitely be announced by… Read More …