Little signs from the corners of the market confirm that something bubblicious is under way.Here they are.
The first is Rock-Tenn, the paaper packaging company, whose stock is rising after announcing the acquisition of Smurfitt-Stone. Now usually the acquirer’s stock will fall, while the acquiree’s stock will rise. Whe you see investors piling into both companies on a tie-up — as if “synergies” were something to be believed — then you know investor giddiness is getting towards weird levels.
The other signal we see comes from the already-bubble rare earths space. Today is the lockup for MolyCorp, and the company announced a new share offering, which initially slammed the stock.
But! At the same time, it announced it was moving to the next stage of expansion at its Mountain Pass location.
Of course, it was always assumed — we think — that the company would continue its expansion plans at its prime location. It’s hard to see why this justifies such a big move higher, especially on top of the share offering news.
But hey! A good headline is a good headline. Buy!
Oh, and one more bonus. McDonald’s reported fairly mediocre earnings, but the stock is now up. Naturally.
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