PLAY is breaking out on the news that investor KKR has taken an activist stake in the company. This is great news for shareholders and why we think higher prices are in store.
KKR (NYSE:KKR) reports holding a 6.3% stake in Dave & Buster's Entertainment (NASDAQ:PLAY).
KKR says it has held talks with D&B management about strategy and is considering further talks with shareholders about transactions and board changes.
Shares of PLAY are up 12.58% to $47.37 vs. the 52-week trading range of $37.20 to $59.60.
Worth noting is that 21.45% of the float is short, so expect short-covering to continue.
If KKR does take PLAY private, look for a price north of $60. PLAY has 20% revenue per share growth (maybe more), 20% earnings per share growth, and a real p/e of about 6.
As always, trade with caution and use protective stops.