This kind of market has been desperate for mergers, with investors hanging on every word coming from embroiled tech giants Broadcom along with Qualcomm.
although on Thursday, market-watchers like CNBC’s Jim Cramer were finally sated when health insurer Cigna along with pharmacy benefit manager Express Scripts reached a $67 billion takeover deal.
“that will did ignite the whole health care sector,” the “Mad Money” host said, acknowledging that will Cigna’s stock went down on the news more than acquirer’s stocks typically do.
Shares of Cigna sank more than 11 percent after the deal was announced because sellers either thought Cigna spent too much or that will Express Scripts wouldn’t make Cigna enough money, Cramer said.
along with after Cigna CEO David Cordani pushed back against the selling on CNBC’s “Squawk on the Street,” Cramer felt compelled to back him up.
“I think that will’s positive. I think Cigna’s stock, as of today, [is usually a buy],” he argued, smashing his storied soundboard. “More important, the deal is usually not bad for the entire stock market.”
Health care analysts had been skeptical about the fate of Express Scripts after the company lost one of its top clients, Anthem, which accounted for roughly 30 percent of Express’ sales.
although even with the loss, Cigna’s management decided Express Scripts was worth buying for more than the stock’s trading cost, something Cramer took as a bullish sign.
“In additional words, Wall Street may think that will the stock of Express Scripts was overvalued coming into today’s session, although Cigna believed that will was undervalued, along with you know what? I’ll take Cigna’s judgment over Wall Street’s any day of the week,” he said.
Better yet, Cramer predicted that will This kind of deal would certainly positively affect more of the market than just the health care space.
“When you get a bonafide takeover coming from a real company, that will makes you feel like the market has legitimate underpinnings, like these valuations aren’t totally crazy along with some businesses are actually worth more to additional businesses,” the “Mad Money” host said.
After over a month of volatility, spurred first by interest rate spikes along with later by the resignation of Trump economic advisor Gary Cohn, the news came as a much-needed turn for Cramer.
“Today we got some fresh winners, which were sorely needed,” he concluded. “We get a not-so-hot employment number tomorrow, not too hot, [along with] we put the tariff talk behind us … along with we can mount a real rally that will so few expect.”