Why Shares of Western Union and MoneyGram Jumped Today
Shares of money transfer company MoneyGram (NASDAQ: MGI) rose as much as 50% at the start of trading on June 2. Although they cooled off some after that initial spike, they remained up by an impressive 33% or so by 10 a.m. EDT. Peer Western Union (NYSE: WU), meanwhile, was higher by around 12% by 10 a.m., only slightly off of its early trading high of a 15% gain. This is actually an odd occurrence when you take a look at what's going on.
After the close on June 1, Bloomberg reported that Western Union was looking to buy smaller rival MoneyGram. This is the second time MoneyGram has been in play in recent years. Chinese firm Ant Financial, having agreed to buy the company for $1.2 billion, ended up abandoning its bid in 2018 after facing U.S. regulatory and political pushback. Western Union will have to get any deal approved by regulators, too, but shouldn't have quite as hard a time. The biggest hangup is likely to be over questions of industry scale. However, with online payments gaining importance, the position of Western Union and MoneyGram in the money transfer business isn't as sizable as it once was.
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Source Fool.com
