What Happened?

Shares of bedding manufacturer Tempur Sealy (NYSE:TPX) jumped 5.9% in the morning session after a federal judge cleared the way for its (Tempur-Sealy's) merger with Mattress Firm. 

After the ruling, Wedbush upgraded Tempur-Sealy's stock from Neutral to Buy, stating, "Friday evening, Judge Eskridge denied the FTC from blocking the pending merger of Tempur-Sealy and Mattress Firm (MFRM)—clearing what is likely the last major hurdle preventing a tie up of the country's largest mattress manufacturer and specialty mattress retailer." 

Tempur-Sealy first offered $4 billion for Mattress Firm in 2023, aiming to expand its product lineup and reach more customers. The deal is expected to complement TPX's operations, cut costs, and contribute to earnings within the first year of closing.

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What The Market Is Telling Us

Tempur Sealy’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

Tempur Sealy is up 19.7% since the beginning of the year, and at $66.80 per share, has set a new 52-week high. Investors who bought $1,000 worth of Tempur Sealy’s shares 5 years ago would now be looking at an investment worth $2,902.

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