Capri (NYSE:CPRI) stock is rocketing higher on Thursday following reports that Tapestry (NYSE:TPR) may be planning to acquire the luxury goods company.
According to these reports, insiders close to the deal claim it could be announced as early as today. Investors will note that Capri was going to report earnings on Tuesday but delayed them to today without giving investors a reason.
If a deal is announced, it could be a massive one. Insiders claim that the acquisition would see Coach-owner Tapestry acquire the Michael Kors owner for a price in the high single-digit billions. However, we won’t know the exact price of the deal unless it’s announced.
The idea of two major luxury brands merging makes sense. The U.S. economy, as well as those overseas, has been dealing with increasing inflation that could lead to a recession. That’s put pressure on luxury brands that rely on customers having extra spending money for their goods.
How This Affects CPRI Stock
If Tapestry does acquire Capri, it could be a major boon for the company’s stock. Any deal would likely place a significant premium on CPRI stock, which would be good news for investors. It would also likely result in the stock’s eventual delisting as the company would fold into Tapestry.
Today’s reports have CPRI stock seeing heavy trading. As of this writing, more than 2.5 million shares of the stock have changed hands. For comparison, the company’s daily average trading volume is 2.5 million shares.
CPRI stock is up 57.6% as of Thursday morning.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.