Here's Why Callaway Golf Spiked 5% On Tuesday

Shares of Callaway Golf Co ELY traded higher by more than 5 percent on Tuesday after the company disclosed that Topgolf Entertainment Group - a company in which it owns an 18.5 percent stake - has received a significant minority preferred stock investment from Providence Equity Partners. Topgolf noted that it will use a portion of the proceeds from the investment to repurchase shares from its existing shareholders, including Callaway Golf. Callaway Golf further stated that it has agreed to sell 9.6 to 10.9 percent of its shares in Topgolf as part of the repurchase program. The company added that it expects to recognize a gain of $17.4 million to $19.7 million in the first half of 2016. Finally, Callaway Golf said that it won't update its financial guidance but disclosed that the transaction would be incremental to its prior guidance.