Root (NASDAQ:ROOT) stock is falling on Friday after the car insurance company responded to reports of a takeover bid.
Root’s board of directors released a joint statement concerning reports that Embedded Insurance has been attempting to buy the company. Those reports claim that it was willing to pay $19.34 per share for ROOT stock.
However, the company’s board doesn’t back up these claims in a recent statement. Here’s what it said about the acquisition talk:
“Root’s Board of Directors has always considered and evaluated, and will continue to consider and evaluate, any bona fide proposal or opportunity to enhance shareholder value in accordance with its fiduciary duties. At this time Root is not in receipt of any proposal that is either actionable or in the best interests of Root’s shareholders.”
How This Affects ROOT Stock
Investors were excited about the prospect that ROOT stock could be acquired by Embedded Insurance. That resulted in its shares rising higher when the claim was made last week. Now that the company’s board has rejected these reports, it only makes sense that ROOT would give up at least some of those gains.
Despite today’s news, shares of ROOT stock aren’t seeing heavy trading on Friday. Only about 50,000 shares have changed hands as of this writing. That’s still well below its daily average trading volume of about 372,000 shares.
ROOT stock is down 19.7% as of Friday morning.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
