Summary
Michael Kors (KORS) buys Versace For $2.12 Billion.
Its stock price dropped 8.21% upon news of the potential acquisition.
The stock is now in the 'oversold' territory.
In 2017 Versace reported an annual loss of 7.4 million euros.
Kors' P/E ratio of 15 is relatively low for the industry.
Michael Kors (KORS) has closed a deal to buy Versace for $2.12 billion. Initial news of the potential acquisition resulted in a sell-off in Kors stock, causing the stock price to drop 8.21%.
However, should investors really be worried about this acquisition? More importantly, is this knee-jerk reaction to the news a buying opportunity?
Citi analyst Paul Lejuez described the movement as an "overreaction" with some considering the stock to be oversold.
