March 3, 2013- Coach (COH), the world-famous manufacturer of high-end leather goods for women, saw the value of its common stock leap forward by five percent to $48.90 on rumors that it is interested in finding a buyer to become the new owner.
The news of that rumor was exposed in an article in Deal Reporter a company that thrives on the gossip (sometimes true, other times merely an unfounded claim) that one corporation is in the process of buying out another corporation.
When asked if there was any truth to the rumor, executives at Coach chose not to respond or offer an answer of any kind, further fueling the rumor that something really is about to happen.
Based on the $48.90 stock valuation, Coach has a market value of thirteen billion seven hundred million dollars.
It also has a recent history of disappointing financial performance. Its fourth quarter revenue and profit did not live up to the forecasts of industry analysts. It could be because Coach’s soft and supple leather products tend to be expensive and the weak U.S. economy left too many consumers with not enough discretionary income to purchase a famous Coach handbag.
Growing competition from organizations such as Michael Kors Holding Company may have also impacted the poor results experienced by Coach.