American Express (AXP) has been a part of my long term holdings for over 15 years. It has done me well over the years. From the beginning I have had their anorexic dividend reinvested through their DRIP. It is tiny but every little bit helps over the years.
Thursday last, AXP jumped up over 3%. Rumors that Citi Bank maybe looking to buy AXP was suggested as the main driving force for the upward move. I don’t really know, but it is nice to see AXP over $60 per. I just feel a little better when my stocks go up. The reason I’m not more excited is that I have heard this tune before. It seems every so often for the past few years some “pro” starts talking about how great a “fit” AXP would be with (your bank of choice). Nothing has happened yet. Citi and American Express have no comment right now. I think that is what AXP said last time the rumors started.
Let’s say for argument’s sake this time is different, Citi does buy American Express. Two things come to mind quickly. What would they use as a name for the new company? The American Express name is worth its weight in gold, at least I think it is. It would make me a little sad, after all these years, to see the name erased from the corporate landscape. The other thing is would Citi make a cash offer or would we receive Citi stock? I already own a bank and not really sure if I want my money tied up in two.
It is all speculation anyway right now. If I had to guess probability, this Sunday afternoon, it would be less than 20% chance that Citi throws money on the table. Now if come Monday morning Citi announces an offer in that $75 - $100 share range we will know I was wrong. Wrong and a few dollars better off than I was at Friday’s close.
That’s it for today, good luck during the new trading week. And as always keep an eye on your EveryDay Money.
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