After Washington Mutual’s (WM) purchase of Providian and Bank of America’s (BAC) recent buy of MBNA, it was widely expected that smaller credit card issuer Metris (MXT) would eventually get a similar takeover bid. In fact, readers of this blog were alerted to the potential of Metris even before those deals were announced.
Below is an excerpt from our post “Metris Continues its Turnaround” posted in December 2004:
“With some analysts still bearish on the company’s future, combined with a staggering 24% of the float sold short, there are many reasons to think that Metris shares will continue their march higher in 2005. Contrary to popular belief, it’s not too late to get in, even at the current $11 price tag.”
Today’s $15 per share cash bid by HSBC closes the book on the Metris story. Fortunately though, there are still excellent values in the financial services area, making reallocation of that capital a very opportunistic redeployment. Investors who want to stay in the credit card space should turn their attention to long-time Peridot favorite Capital One Financial (COF).