What a Start to 2013 Zipcar!
Today Zipcar was bought out by Avis rocketing the share price to $12.20, as a shareowner I for one am pretty estatic. You always dream of owning a stock that gets bought out, and to own one is pretty special. I think Avis felt it was a great time to buy and wanted to make sure Zipcar didn't experience any more positive pops before taking over.
Some may be a bit disapointed that they will not be able to ride the expected growth in the coming years, but I have more of a feeling of relief. Yes, Zipcar turned a profit for the first time but just how small it was compared to share price scared me. Also fears of what it cost to acquire members were getting on my nerves almost pushing me to sell, but boy am I glad I didn't! Yes it would of been nice if Zipcar turned out to be the next Chipotle, but such is life.
Though I did not buy Zipcar based off of the recent Insider trading I find it interesting to find a case that has sucess. In August 2012, Director Stephen M Case acquired a total of 1 million shares of IP totaling about $8 million paid for them, was he betting on a buyout? We will never know, but Insider Trading on the buying end takes place because they sincerly believe the stock price will rise, and I'm sure Mr.Case is pretty happy with his millions doubling.
Avis also is up (5%) today as I feel investors are happy with the deal they made, so rush to buy Avis? When buying Avis you are buying into a lot more than the Zipcar part of their business and with Avis sitting a 52% high and up almost 100% in the past year. But at the same time Avis has a nice P/E ratio of 14.68 but with no growth expected next year. Will the acquisition of Zipcar help that? Or will the debt that Avis is going into cancel it out? Personally I believe Avis is not a good buy at It's high price and lack of growth.
Writing in Jubliancy,