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Solstice Advanced Materials Surges 16% After Scrapping $14.5 Billion Element Solutions Acquisition
Solstice Advanced Materials Inc. $SOLS
$63.55+12.80%as of publication
- 5D Change
- +13.16%
- Notional
- $1.01B
Solstice Advanced Materials shares climbed roughly 16% on Friday, reaching $65.33 in midday trading, after the specialty materials company and Element Solutions mutually agreed to terminate their planned $14.5 billion merger. The deal's collapse was welcomed by markets on both sides: SOLS jumped on relief that the large acquisition was off the table, while Element Solutions received an upgrade from Freedom Broker analyst David Silver, who raised his price target on ESI to $48 from $42 and reinstated a Buy rating. Silver framed the termination as an "elegant and effective solution," arguing it would quickly reverse the roughly 16% share price erosion ESI had suffered since the deal was first announced and restore the appeal of pure-play exposure for investors in each company.
SOLS was also flagged as seeing elevated options activity heading into the session, reflecting heightened trader interest around the announcement.
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Sources
- WallstengineFreedom Broker Upgrades $ESI to Buy, Raises PT to $48 from $42 Analyst comments: "We consider the mutual decision to terminate the previously announced acquisition of ESI by Solstice Advanced Materials to be an elegant and effective solution that should quickly reverse ESI’s ~16% share price erosion since the deal was first announced. We believe the opportunity for investors in both companies to choose among pure-play exposures will quickly restore the luster lost as a result of the agreement to be acquired. We would buy ESI aggressively on this news. We restore our pre-agreement price target of $48." Analyst: David Silver
- OpenOutcrier$SOLS (+14.4% pre) Solstice Stock Jumps After Calling Off a Major Acquisition - Barron's
- ZerohedgePremarket movers: Mag 7 names are mostly higher: Tesla +0.4%, Alphabet +0.3%, Amazon +0.4%, Meta +0.2%, Apple +0.2%, Microsoft -0.3%, Nvidia -0.3% Affirm Holdings (AFRM) climbs 13% after the financial technology company forecast revenue for the first quarter that beat the average analyst estimate. Also, the company and Shopify expanded their global partnership to launch Shop Pay Installments in Australia. Autodesk (ADSK) falls 4% as the application software company forecast adjusted earnings per share for the third quarter that missed the average analyst estimate. Citi notes that the company’s sales growth looks to be moderating in the second half of the year. Elastic (ESTC) rises 18% after the company boosted its adjusted earnings per share guidance for the full year and posted guidance that beat the average analyst estimate. Gap (GAP) gains 14% after the apparel retailer named Michael Francis as head of Old Navy and profit outpaced estimates, offsetting a sales decline at the value chain and lower sales guidance. Marvell Technology (MRVL) reported second-quarter results that modestly beat expectations and gave an outlook that is above the analyst consensus. However, shares of the chipmaker are down 7%; the stock had soared more than 180% this year, as of its Thursday close. PayPal (PYPL) falls 17% as people familiar with the matter say that a consortium of buyout firm Advent and payment processor Stripe has decided to abandon its pursuit of the fintech pioneer. SentinelOne (S) falls 3% as the cybersecurity platform’s forecast for fiscal-year adjusted EPS trails the average estimate. Solstice Advanced Materials (SOLS) rises 15% after the company and Element Solutions mutually agreed to terminate their merger pact. Ulta Beauty (ULTA) falls about 1% as higher discounts and promotions weighed on the cosmetics retailer’s margins. Analysts said gross margins were underwhelming but noted guidance could be conservative.
- MarketRebelsStocks expected to have increasing option volume: $MRVL $WDAY $PD $GAP $IREN $S $AFRM $ULTA $RBRK $ADSK $FOX $FOXA $MRNA $ESI $SOLS
- blockonomi.comSolstice (SOLS) Stock Rockets 16% After Scrapping Element Solutions Deal
- BusinessSolstice Advanced Materials and Element Solutions said their shareholders should end their plans for a $14.5 billion combination. And they did.