Monday, April 6, 2009

Textron pops---As advertised!

This weekend, I advertised Textron as a play on the recovery in private jets.

You had a half hour to pick the stock up under Friday's closing price, before it popped. Now Bloomberg is reporting take-over rumors!

April 6 (Bloomberg) -- Textron Inc. climbed to a two-month high in New York trading amid speculation the maker of Cessna aircraft and Bell helicopters will be acquired.

Textron rose 84 cents, or 11 percent, to $8.26 at 4 p.m. in New York Stock Exchange composite trading, the highest price since Feb. 2. A spokeswoman for Rhode Island-based Textron declined to comment on the speculation.

Yachts and private planes are two different animals. Everyone knows about the $35 million yachts that cost $21 million, that an intermediary has put up $1 million to start the construction, who plans to flip the yacht to someone else.

But then RBS starts yanking financing on these vessels from $34 million, to $33, to $32, to $31, eventually getting down to the $21 million figure, cutting off the financing amounts by a million every other week.

You are then just left with only those buyers that are real.

Who needs this headache?

So you keep your planes, and only those that are real, keep their boats. And the flippers go elsewhere. They're back to trading stocks!

How tough is that?

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