Verizon/Yahoo Deal Announced: More Internet M&A to Come?

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July 24, 2016 2:23pm NASDAQ:IAC NASDAQ:MELI

backroomdeals600X300Verizon Communications Inc (NYSE:VZ) is set to announce an agreement on Monday to buy Yahoo Inc (NASDAQ:YHOO) for a deal estimated to be worth $4.8-$5 billion.


This deal comes on the heels of Linkedin’s (NYSE:LNKD) acquisition by Microsoft (NASDAQ:MSFT) last month. In looking at the possibilities of who might be next, MercadoLibre (NASDAQ:MELI), Twitter (NYSE:TWTR), IAC/Interactive (NASDAQ:IAC), and TripAdvisor (NASDAQ:TRIP) offer up intriguing possibilities. In most investors’ lifetime, the idea of owning stocks that will be acquired is usually quite elusive, but there are better ways to spread the investing chips around.

Two ETFs that offer exposure to this sort of investing approach are First Trust Dow Jones Internet ETF (NYSE:FDN) and Global X Social Media ETF (NYSE:SOCL). While FDN is up less than 3% YTD, the ETF has had 20% plus gains in the 3 of the last 4 years. SOCL tends to be more volatile with gains of 9% so far this year and gains of 64% back in 2013, followed by a 15% drop in 2014.

Depending on your investor appetite for risk, these two ETFs can offer the best areas for reward if we do see consolidation in the internet space.


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