GeoEye Stock Jumps on Takeover Rumor
GeoEye's (GEOY) stock has jumped 17% at midday. Not much on Twitter or other news sources as there is only speculation about the company being a likely takeover target. According to StreetInsider who cited DealReporter, the company has hired Goldman Sachs. Possible bidders include BAE, Northrop, Raytheon and Harris, the usual cadre of defense contractors. And "The Fool.com" believes you shouldn't "read too much into the rumor." But they do think that GeoEye may be an inexpensive investment at this point due to the fact that the satellite business has a high barrier to entry and their forward P/E looks inviting. As the defense business slumps due to Pentagon budget cuts, these contractors might be looking for a company with a long-term govenment data contract already locked down.