Gun Stocks Are on the Rise, While 2 Communications Stocks Are Rallying After Cancelled Merger

Three to Tango

Shares of Polycom Inc (NASDAQ:PLCM) have gained over 12% today after the company announced that it has terminated its previously announced deal with Mitel Networks Corporation (NASDAQ:MITL) so that it can instead be taken over by private equity firm Siris Capital Group LLC. Mitel Networks’ stock is also up by approximately 18% this morning. Back in April, Mitel Networks Corporation (NASDAQ:MITL) announced that it had agreed to buy Polycom Inc (NASDAQ:PLCM) for $2 billion in a cash-and-stock deal. The merger agreement came about after activist Paul Singer acquired stakes in both companies and lobbied for a marriage between them. When the merger was agreed upon, Polycom shares were valued at $13.44 apiece, but both stocks started to slide after the announcement. As the value of the deal kept decreasing, Polycom received a higher offer and Mitel Networks declined to renegotiate. Now, Polycom is set to compensate Mitel with a termination fee of $60 million. Siris Capital has offered $12.50 for every Polycom share, valuing the company at $2 billion, including debt.

At the end of the first quarter, 22 of the funds followed by Insider Monkey were invested in Polycom Inc (NASDAQ:PLCM), up from 18 reported as of the end of December. Together these funds amassed 22% of the company’s common stock. Mitel Networks Corporation (NASDAQ:MITL), on the other hand, was less popular among top hedge funds, with only six of them having reported a stake in the company as of the end of March, down from nine registered a quarter earlier. Jim Simons‘ Renaissance Technologies was betting on both stocks, having indicated ownership of 1.36 million Mitel shares and 1.14 million Polycom shares in its latest 13F filing.

Strong Furniture Demand

Haverty Furniture Companies, Inc. (NYSE:HVT) provided an update on its second quarter sales today, which registered a 3.8% year-over-year increase to $194.8 million. Comparable-store sales rose by 3.8% as well. “Our sales results for the second quarter were as expected and in line with our June 15 sales update. Consumer spending continues to coalesce around traditional holiday sales events reinforcing the importance of a strong brand, excellent online and instore experiences, and demonstrable value propositions. We have new advertising in place and promotional activities planned for the coming weeks to inspire new and existing customers to consider a summer refresh of their home furnishings,” commented Clarence Smith, CEO of Haverty Furniture Companies, Inc. (NYSE:HVT).

The popularity of Haverty among elite hedge funds inched up during the first quarter, as the number of funds with long positions rose to 11 from ten. Shares of the company gave gained 1.5% today.

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