Santander Consumer Holdings USA Buyout Rumor Talk With BTIG's Mark Palmer

Shares of Santander Consumer USA Holdings Inc SC briefly spiked as high as $12.19 in early Tuesday trading following a report that the company could be drawing buyout interest.

A new El Confidencial report attributes last Friday’s brief spike to near $13 and Tuesday mornng’s strong open to rumors of a potential buyout.

BTIG’s Mark Palmer told Benzinga that most of the buyout buzz comes from speculation that parent company Banco Santader, S.A. (ADR) SAN could potentially buy back its U.S. subsidiary. Santander Consumer USA Holdings specializes in auto loans and other unsecured consumer lending products in the United States.

Related Link: The Largest M&A Spreads On The Market

According to Palmer, Santander Consumer USA Holdings may be better suited to operate as a private company. He noted that Banco Santander leadership has indicated in the past that the company intended to either straighten out its U.S. holding company’s business or sell it at some point.

Since going public in 2014 at $24 per share, Santander Consumer USA Holdings has been an abysmal investment. The stock is now down 50.66 percent from its IPO price and down 24.9 percent year-to-date. Parent company Banco Santander’s stock is up 4.6 percent in 2016.

Both Friday and Tuesday’s share price spikes in Santander Consumer USA Holdings were short-lived, and the stock is trading mostly flat in mid-day Tuesday trading.

Disclosure: The author holds no position in the stocks mentioned.