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Is FIS stock now a buy following Worldpay announcement?


So it seems that the US fintech previously known as Fidelity National Information Services is going to get rid of Worldpay, having forked out a stunning USD 43bn for the company only four years ago. The logic here is that by hiving off Worldpay, FIS can unlock value for shareholders, which is a total U-turn from its original argument for merging the two businesses.

FIS [NYSE:FIS] is being pushed into this move by activist investors, among them DE Shaw and our much-loved Jana Partners, who like many investors are unhappy about the way FIS stock has slumped 45% SINCE it completed the Worldpay deal, buying the payments company from Vantav in 2019.

FIS is operating in a sector where it doesn't pay - if you will forgive the pun - to stand still. But there was an element of FOMO in the decision to buy Worldpay as competition was hotting up in the sector going into 2019.  But the Worldpay marriage has not paid out the profits that FIS was anticipating. The big question here for stockholders - or prospective buyers of FIS stock - is whether this move will turn the company around. Is there a prospect for a major rally in the stock, and is now the time to get in?

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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