Goldman Sachs Group, Inc. (GS)’s Big Move

Both the blog post on Seeking Alpha from Copperfield Research and a subsequent report from Gotham City Research reached conclusions that the shares were overvalue and found some issues with the companies accounting. While there were specifics cited in both reports, the size of the overall impact on earnings at Ebix going forward was not conclusive. While earnings could be lower, the stock went from $30 per share prior to under $15 per share at one time. The impact on the share price appeared overdone and apparently Goldman Sachs decided there was value and to take action. Since the deal was announced, the Director of Research at Gotham City stated, “We believe that should Goldman Sachs Group, Inc. (NYSE:GS) or another entity acquire Ebix, they will come to regret it.”

Conclusion

Ebix is trading at $20 per share. Following the announcement, the shares traded at over $20 per share based on speculation Goldman would have to increase their offer or another buyer would emerge. That did not happen and the shares retreated to $19.50 and have recently increased to $20 per share. While most acquisition targets trade at a slight discount to the closing price due to risks of it not closing and the time value of money, the price of Ebix Inc (NASDAQ:EBIX) shares is support by short positions closing out prior to closing. At this time, it does not appear there is much for investors to do with Ebix shares.

The article Goldman Aquires This Company At An Attractive Valuation originally appeared on Fool.com and is written by Mike Thiessen.

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