Coinstar Rallies on Reports Company is PE Target
CSTR traded as much as 9% higher early on Thursday.
In the afternoon, shares corrected following comments from the company's CEO. While speaking at a Canaccord Genuity conference, Coinstar's Davis stated that he "didn't know where the story came from."
The stock has been frequently discussed in recent months. Famed short seller Jim Chanos stated that he had gone short the stock on the assumption that the demand for Coinstar's Redbox DVD rentals would sharply decline in the coming years.
The company has also been working to expand into other vending businesses, inking a deal with Starbucks (NASDAQ: SBUX) for coffee vending machines.
While the report remains a rumor at this point, a PE firm may be interested due to the predictable nature of Coinstar's earnings. The company is far removed from its yearly high -- when it was trading near $70 per share -- so a takeout at these levels might be feasible.
Shares of Coinstar traded near $51.45 on Thursday afternoon.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.