Global Business Travel published its first-quarter results this morning and announced some even bigger news.
The company is on track to be acquired by Long Lake Management.
Global Business Travel Group (NYSE: GBTG) stock is soaring in Monday's trading. The company's share price was up 57.4% as of 2 p.m. ET.
Global Business Travel published its first-quarter results this morning, but the Q1 print isn't the driving force behind the stock's explosive gains today. Instead, the big valuation surge is being propelled by news that Long Lake Management is on track to buy the business at a substantial premium.
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Global Business Travel recorded earnings per share of $0.10 on sales of $840 million in the first quarter. Revenue was up roughly 35.5% year over year, and the business's smaller profit looks doesn't seem to be a problem in light of strong sales growth. Net income declined roughly 28% year over year, but it still came in at roughly $54 million. While the company's Q1 results aren't the primary catalyst in the stock's rally today, they do help support the company's valuation if the deal were to collapse.
Global Business Travel shareholders are scheduled to receive $9.50 per share through the buyout that's projected to close this quarter. As of this writing, that buyout price suggests potential upside of roughly 1.8%. With the buyout price representing such a small upside premium compared to where the stock is trading right now and the potential for investors to see closing fees through their brokerages, there's probably not much reason to jump into a position at this point.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.