Now that news has officially broken that Popeyes has been acquired, investors are asking, "Should I buy Popeyes stock?"
Popeyes Louisiana Kitchen Inc. (Nasdaq: PLKI) stock is up 19% today (Tuesday) after Burger King's parent company, Restaurant Brands International Inc. (NYSE: QSR), announced it will buy the fast-food chicken company.
RBI announced it will buy Popeyes for $79 per share this morning. The price is a 27% premium on the 30-day average of Popeyes stock ending Feb. 10. The deal is worth $1.8 billion and will be financed with cash on hand along with loans from JPMorgan and Wells Fargo.
The deal between Popeyes and RBI is expected to close in early April.
So is this the time to buy into Popeyes stock now that it's soaring? Here's how to handle Popeyes stock today...
Should I Buy Popeyes Stock Now Before the Acquisition?
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Merger and acquisition news can be profitable to trade, but the timing on this one has long passed. The rumors of the Popeyes-RBI deal have been circulating since Feb. 10.
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On top of that, Popeyes stock has already climbed to $78.82 per share. That is almost the full price per share that RBI will pay investors in April.
Since most of the premium being paid out has already been added to Popeyes stock, it is too late to profit from this deal.
Along with the profit potential being over, Money Morning Director of Tech & Venture Capital Research Michael A. Robinson warns against buying into stocks with deals pending across the board.
"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."
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