Firm A is one of the largest airlines in the world and is basedin Europe. Firm A sold all its struggling operations that operatein the United States to Airline B for a price much less thanindustry experts had expected.

Despite this lower than expected sales price, Firm A’s stockprice sharply increased. The primary explanation for the rise inthe stock price was hinted at in the announcement.

Firm A indicated they would not rush on spending dollars fromthe sale on non-value adding projects but were considering sharerepurchases.

Answer the following:

What is your interpretation of this scenario?