LG Display Shares Make Parabolic Move Following Rumor Of Takeover Interest

LG Display Co Ltd. (ADR) LPL shares rose 3 percent Tuesday. Although some of the move may have been in tandem to the broader market, there was a rumor making the rounds that Apple Inc. AAPL may be eyeing the company.

A source told Benzinga that Apple may be looking to expand vertically by making an offer for one of its key suppliers.

Logic In Apple's Speculated Interest

LG Display is touted as the main licensed manufacturer of the more color-accurate IPS panels used by Apple and others. Apple has collaborated with LG Display in making UltraFine 4K Display and shipments of this Apple exclusive product for customers who placed orders in late October began last Friday.

Recently, LG took steps to go full throttle into OLED panel making, as it seeks to supply Apple with it in 2018 following the footsteps of Samsung, who is to be Apple's sole supplier in 2017.

Thus, there seems to be some logic in Apple's speculated interest in the Korean company.

Volatility Around Rumors Presents Trading Opportunity

Immediately after the rumor made the rounds Tuesday, shares of LG Display reversed early losses, moving into positive terrain. After rising steadily and in the process making a parabolic move until early afternoon trading, the stock consolidated its gains for the rest of the session in a broadly sideways movement. However, volumes were light, at 1,825 shares traded compared to the average volume of 451,699.

Typically, unconfirmed rumors such as these could lead to a selloff in the subsequent sessions and the degree of retreat could depend on the magnitude of its run up in reaction to the rumor.