Exela Technologies (XELA) Stock Squeezes 17% Higher – InvestorPlace
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Another entity preliminarily offered to buy one of its business units
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Exela Technologies (NASDAQ:XELA) stock is soaring 17% today after another entity preliminarily offered to buy one of its business units last week. This is sparking hopes that short sellers will cover their bets against XELA stock.
Exela, according to the company’s business profile on Yahoo Finance: “provides transaction processing solutions, enterprise information management, document management, and digital business process services worldwide.”
On July 13, Exela reported that it had obtained a “preliminary, nonbinding” offer to buy one of its businesses that generates annual sales of about $200 million. The company noted that the offer was subject to certain conditions, including pending due diligence by the entity that made the nonbinding offer. Signaling that it had not yet decided whether to accept the offer, Exela reported that its board would “carefully review the Proposal.”
Exela did not identify the entity that made the preliminary offer or which of its businesses that the entity is interested in buying. Exela last month announced that it would look to sell a number of its assets. The company noted on July 13 that it was in ongoing talks about unloading a number of its other assets on top of the aforementioned preliminary deal.
In an article yesterday, InvestorPlace columnist Chris MacDonald stated that:
Exela is looking to bolster its balance sheet via paying down debt and reducing its annual interest expense. A divestiture [of one of its business units] is one simple way the company can accomplish these goals.
On June 28, the company announced that it had obtained a four-year, $2.5 million deal from French National Insurance Fund. The deal, under which the French national health insurance system will utilize Exela’s systems to digitize more quickly. It could eventually generate $4.5 million for Exela.
And on June 22, the tech firm disclosed that it had signed a $136 million, three year contract from an unnamed customer.
On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been GE, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.
Article printed from InvestorPlace Media, https://investorplace.com/2022/07/exela-technologies-xela-stock-squeezes-17-higher/.
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