Why Allscripts Healthcare Solutions Popped
Sep 28th 2012 4:02PM
Updated Sep 28th 2012 4:04PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of health care information technology company Allscripts Healthcare Solutions (NAS: MDRX) rose as much as 21% after a report came out that the company may be up for sale.
So what: According to a report from Bloomberg, Allscripts may be interested in putting itself up for sale. Bloomberg cites people familiar with the matter and notes that Allscripts has contacted various private-equity and public firms, including Blackstone Group (NYS: BX) , attempting to drum up interest in the company.
Now what: Now I think we avoid Allscripts like the plague. If you recall, Allscripts lost a huge chunk of its value back in April as sales shrunk, development costs spiked, and three of its board members left. Noting now that the company wishes to put itself up for sale does not bode well in any way, form, or shape. To me, it appears the company can't figure out what's wrong and is looking for the quickest way out to maximize shareholder value. If Allscripts doesn't find a buyer, things could get ugly all over again.
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