Shares of spatial data company Matterport(NASDAQ: MTTR) jumped on Monday morning after the company announced it was being acquired by CoStar(NASDAQ: CSGP). According to data provided by S&P Global Market Intelligence, the stock was up as much as 175.3% and is up 170.7% for the week as of 2:30 p.m. ET.
The buyout
CoStar is buying Matterport for a whopping $5.50 per share, which compares to the closing price of $1.74 per share last Friday. The deal includes $2.75 per share in cash and another $2.75 per share in CoStar stock, which is up on the news this week.
This is one of the largest premiums I've seen, and there may be reason to keep holding on until the deal closes.
What to do now
Investors have a few options now that the deal has been announced. Matterport's shares are trading for $4.72 late on Friday, so there's about 17% upside in holding until the deal closes.
Investors could also take a profit after the bounce in shares, leaving that upside on the table. The logic there would be that acquisitions sometimes don't close, and if the deal falls through, shares could drop back closer to $1.74 per share.
The acquisition announcement anticipated the deal would close this year, and given low risk from a regulatory perspective, I am holding onto my shares. But taking some chips off the table is never a bad idea after a huge week like this, which has been a long time coming for Matterport investors.
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Travis Hoium has positions in Matterport. The Motley Fool has positions in and recommends Matterport. The Motley Fool has a disclosure policy.
