This New Trend Has Me Worried: Dell Inc. (DELL)

Finally, yesterday brought us news that perpetual underperformers Office Depot and OfficeMax might soon be joined at the hip. What happened on the release of this news? Both stocks shot up, as expected; but a more interesting tidbit was that Staples, Inc. (NASDAQ:SPLS) shares rocketed higher as well, by 13%. It might seem rather odd that the main rival of an Office Depot-OfficeMax merger would head higher, but consider that merger-related integration troubles and store closures associated with their synergy would work in Staples’ favor by allowing it to acquire more customers and, dare I say, take even more market share from this less-than-dynamic duo.

Make no mistake about it, this M&A activity being orchestrated out of weakness is a scary sign and not one to be excited about. Consider yourself warned!

The article This New Trend Has Me Worried originally appeared on Fool.com and is written by Sean Williams.

Fool contributor Sean Williams owns shares of Dell, but has no material interest in any other companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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