September 1, 2010 | In: Services

Burger King Takeover Rumor

BKC has jumped 15.50% to $19.00 so far today. Apparently there is a buyout rumor spreading.

Burger King is not a bad company but I personally don’t like it and I don’t believe in it, especially in the past couple of years. The Burger King ads are almost non-existent nowadays, there are no new products/recipes, which hints that the marketing department currently in charge of BK is extremely weak.

Until now nobody know if the rumor is true or not, and maybe we will not know in weeks (the last takeover rumor reported on this website last week is still to be confirmed or denied).

BKC has dropped slightly to $18.90 while I’m writing this post. BKC has an EPS of $1.36 (a number that is relatively higher than that of MCD, which is an excellent stock). BKC is trading a P/E of 13.95, is bearish on the medium and the long term, and has an RSI of 42.15.

If the rumor is true, then the stock may very well go up to a level 20 times its current EPS, which is 20 x 1.36 = $27.4 (44% higher than the current price). Of course, the stock can touch the $30 level when all the “leechers” jump in for a quick profit.

If the rumor is false, then expect the stock to around $17.50, as many speculators will hold on to their stocks for a while.

One thing remains, who’s rumored to buy this stock? Apparently a few private equity firms are interested in buying Burger King (are we going to have another bidding war involving two or more parties? If this happens then expect the stock to jump much much higher).

My own feeling is that this stock is too risky at this price, but if you know something I don’t about this, then go ahead, buy it!

1 Response to Burger King Takeover Rumor


Burger King Buyout No Longer A Rumor « Fadi El-Eter

September 1st, 2010 at 4:44 pm

[…] reporting on the Burger King takeover rumor, I can confirm right now that it’s no longer a rumor. Apparently 3G Capital, an investment […]

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