Home Depot: "The do it yourself LBO"

General Electric (GE) announced a minor buyout of an energy concern for $603-million. No big shakes for a company with a market-cap over $400-billion. So that can't be the reason for the market awarding GE another $14-billion worth of market-cap with its $1.32/share gain today. More likely, it was Boeing's (BA) $8.8-billion worth of orders for its 787 Dreamliner, of which GE makes engines for. Yea, that must be it. Of that $8.8 billion, somehow nearly twice that amount will flow the GE's bottom line making today's $14-billion market-cap surge fully justifiable. Hmmmm, the math doesn't quite gibe. Maybe it was news of GE joining a bidding war against Rupert Murdoch's News Corp. (NWS) with Pearson PLC for control of Dow Jones & Co. (DJ)? Granted, Dow Jones' $4.9-billion market-cap is a spit in the ocean for a company the size of General Electric, but we know bidding wars for a cyclical print media company trading at its six-year high has to be good news for any one lucky enough to outbid someone as "driven" as Rupert Murdoch.

After the market close, we also learned that Home Depot (HD) is going to nearly LBO itself with a massive $22.5-billion stock buyback of its own shares. Fortunately, the company has $4.127-billion of cash and short-term securities on its balance sheet and it sold its supply business, HD Supply, to another private equity firm earlier in the day for $10-billion. Which means, of course, that the retail homebuilding supply company must only raise another $7.8-billion in debt to gidder done.