"L-3 Shares Climb After CEO Death" - API can't make this stuff up. That is the headline of an Associated Press story talking about the $5 jump today in shares of L-3 Communications (LLL), a large defense contractor. L-3 has been a small Peridot Capital holding for several years. I wrote back in November that a sell-off from $85 to $74 was overdone. The stock subsequently hit a new all-time high of more than $88 per share.

L-3's CEO Frank Lanza, 74, passed away suddenly yesterday and when I saw the headline this morning, I figured we would see some selling pressure today. Lanza co-founded and led L-3 on an acquisition spree that built the company into a $12 billion a year defense giant. Given Lanza's age and lack of a solid succession plan in place, many investors have been wondering what would happen if Lanza left, or worse, passed away.

Such uncertainty usually breeds fear on Wall Street. Not so today, however, as the stock is rocketing ahead by 7 percent. L-3 itself has been rumored to be an acquisition target, and with no clear leadership in place right now, investors seem to think one possible succession plan will be to sell the company. I'd put the odds at no better than 50/50 that such a scenario materializes.