What happened
Shares of Spectrum Brands(NYSE: SPB) were surging 21.9% higher at 11:07 a.m. ET Friday morning after the consumer and home products company announced it was another step closer to selling off its hardware and home improvement (HHI) business for $4.3 billion.
While the development could be a good one for Spectrum, it's still an amazing jump in the share price. Could it be partly a case of mistaken identity?
Image source: Getty Images.
So what
Over a year ago, Spectrum Brands had announced its intention to sell the HHI business to Assa Abloy(OTC: ASAZY), a Swedish conglomerate. But in September, the Justice Department sued to block the sale. To overcome the agency's objections, Assa Abloy announced today that it has agreed to sell its Emtek and Smart Residential business in the U.S. and Canada to Fortune Brands Home & Security(NYSE: FBHS). Spectrum subsequently declared it was confident the deal would finally be completed, which apparently sent its stock soaring.
Yet did Spectrum get an extra boost today because of investor confusion? If you look on a number of financial websites, such as Yahoo! Finance, the New York Stock Exchange ticker SPB is identified as belonging to South Pacific Resources, a tiny Canadian oil sands company that went into receivership in 2015.
It actually spawned a number of news reports that South Pacific's stock was roaring higher on no news (The Motley Fool correctly identifies SPB as belonging to Spectrum Brands). Did a number of people get confused by the news and believe a tiny company was getting bought out and jump into the stock without checking?
Now what
Spectrum Brands has not gotten approval from the Justice Department yet, so it seems the huge move higher could be a bit premature. And anyone who thought a small oil company was getting a big payday might end up surprised to learn what really happened.
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Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Spectrum Brands. The Motley Fool has a disclosure policy.
