Coming off the worst 1-week in the stock market in over a year, stocks are up strongly around 2% as we close out the first day of trading. The financial sector is leading the march higher, due to some positive developments that have come out of Europe over the past couple of days. The news talked about how the leaders of the EU (European Union) might be getting close to reaching a compromise on how to deal with the financial issues they are facing. BUT, that being said do not forget that we have "heard" about how member countries of the EU were going to be able to compromise and fix the problems they are having before. My point is this, take whatever headlines come out of Europe with a grain of salt for the time being.
On a stock specific note, it was reported this morning that Carl Icahn, who is the billionaire investor that offerred to buy the company Clorox (CLX) from its shareholders in August, has withdrawn his $80/share bid. In the press report, he said that the board of directors has expressed no desire to sell the company and therefore he has decided not to pursue his previous takeover offer. I have no idea why the board of directors have completely dismissed Mr. Icahn's offer, especially considering that from the current price of $66/share, the investment return to shareholders would have been $14/share or 23%!
This same situation happened two years ago when Microsoft offerred Yahoo $23/share for the company and the board turned them down (Yahoo was trading at $16 at the time)...Yahoo is now trading at $14! My point? While Clorox is a great global company and sports an attractive 3.8% dividend yield, if you've made a profit on the investment so far, I would sell the stock and move on.
