V - A Great Opportunity Thanks To The Purchase Of Discover Financial By Capital One

2024-02-21 07:38:17 ET

Summary

• Capital One is set to acquire Discover Financial Services in an all-stock transaction valued at $35.3 billion.
• The deal is expected to create significant synergies and combine Capital One's scale and credit cards with Discover Financial Services' global payments network.
• Shareholders who believe the transaction will be completed should consider investing in Discover Financial Services for potential returns.

February 20th was a very big day for shareholders of both Capital One ( COF ) and Discover Financial Services ( DFS ). Although shares of Capital One inched up by only 0.1%, shares of Discover Financial Services skyrocketed, closing up 12.6% for the day. These moves higher were driven by news that Capital One will be acquiring Discover Financial Services in an all-stock transaction valued at $35.3 billion. Assuming all goes according to plan, this maneuver is slated to create significant synergies for the combined enterprise. However, I would even argue that without the synergies, the deal is logical....

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