What's Next for the Angie's List Stock Price After Today's 14% Gain (Nasdaq: ANGI)

The Angie's List stock price climbed 14% today (Thursday) and hit a 52-week high of $9.12 intraday after IAC/InterActiveCorp (Nasdaq: IACI) revealed it has approached Angie's List Inc. (Nasdaq: ANGI) about a merger.angie's list stock price

Billionaire investor Barry Diller's IAC released a letter Wednesday it had sent to Angie's List about the deal. IAC said it was disappointed Angie's board wasn't interested in negotiating and that's why it made its offer public.

IAC offered $512 million in cash, or $8.75 a share, for ANGI. That was about 10% above the company's market value at the close of trading Wednesday before the announcement.

Angie's List is a local services marketplace and consumer review site for everything from home improvement to healthcare.

IAC's proposed merger with Angie's List would be completed via a tax-free, stock-for-stock exchange.

In response to IAC's offer, Angie's List issued a statement late Wednesday saying it will review and evaluate the proposal. But IAC acknowledged Angie's List has rebuffed its offer.

Now, IAC is preparing for a hostile takeover.

IAC maintains a merger offers "compelling strategic rationale." The media and Internet company comprised of more than 150 brands says it is "confident" and "well-positioned to swiftly consummate a transaction that will be in the best interests of Angie's List stockholders."

IAC's offer comes as it hunts for new investments to replace Match Group. Match is IAC's dating subsidiary, which includes Tinder, Match.com, and OkCupid. Match Group is scheduled to go public next week.

With the Angie's List stock price climbing to 52-week highs today, here's how investors should handle ANGI stock now...

How to Play the Angie's List Price Jump

The Angie's List stock price has struggled since its IPO on Nov. 17, 2011.

The company sold 8.8 million shares at $13 apiece, the top of the proposed range. Shares surged 25% to $16.26 in its first day as a public company. Since then, shares have foundered as expansion efforts have increased costs.

[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]

On Oct. 31, ANGI reported breakeven earnings per share, beating forecasts for a loss of $0.05. Revenue rose 7% year over year. However, the company issued downside guidance for the full year. The company expects FY2015 revenue between $344 million and $348 million. That's down from a previous revenue guidance range of $357 million to $363 million.

New CEO Tom Fox said the company will continue to consider a "full range of strategic options to create shareholder value."

There have also been some recent calls for ANGI to put itself up for sale.

Angie's List is facing increased competition from a number of companies, including Amazon.com Inc. (Nasdaq: AMZN). In November 2014, Amazon launched Amazon Services, the e-commerce titan's product aimed at matching shoppers with service professionals.

For investors looking to make a hefty profit from the Angie's List stock price jump, it is likely too late. According to Money Morning Defense & Tech Specialist Michael A. Robinson, chasing buyout candidates this late can be extremely risky.

"I would caution anyone against buying into buyouts, especially when the news has been out for several days," Robinson continued. "I would avoid it unless you are an experienced, aggressive trader and you really know what you're dealing with. Any new rumor could send the stock in any direction. This is not a great strategy for long-term investors."

Stay informed on what's going on in the markets by following us on Twitter @moneymorning.

Related Articles: