Internet sector exchange traded funds enjoyed a nearly 3% rally in eBay (NasdaqGS: EBAY) on Tuesday after an $8.5 billion deal for Skype, in which it has an ownership stake.
Skype’s acquisition by Microsoft (NasdaqGS: MSFT) is “a positive for eBay in our view as it will help unlock about $2 a share in value by monetizing eBay’s 30% equity ownership in Skype, boosting the company’s financial flexibility to pursue strategic acquisitions and/or share buyback,” said Jefferies analysts in a note Tuesday.
eBay represents 20.5% of Internet HOLDRS (AMEX: HHH). Other ETFs that hold the stock include PowerShares Nasdaq Internet Portfolio (NasdaqGM: PNQI) at 7.2% and First Trust Dow Jones Internet (NYSEArca: FDN) at 5.9%.
Internet HOLDRS
The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.