Last Friday afternoon, as I noted in the comment section on our website, news broke that Home Depot is considering making a bid for XPO Logistics (NYSE: XPO). The news was a welcome early Christmas gift for shareholders, as the stock shot up to $90 a share.

Home Depot and XPO have yet to publicly comment on the report, which cited an anonymous source. Meanwhile, the share price has now rallied beyond $90, indicating that the market believes there’s substance behind the report.

The reason that Home Depot may want to acquire XPO, according to the source, is that it believes Amazon is also thinking about buying XPO. It wants to beat Amazon to the punch.

Common carriers such as the U.S. Postal Service, UPS and FedEx will not deliver heavy items to the end customer. The last leg of the delivery is what’s known as “last mile.” This is where XPO comes in: it is the largest provider of last-mile delivery service for bulky shipments in North America.

Home Depot, of course, is one of the largest sellers of large home appliances and furniture. Amazon, too, has recently made serious effort to sell more large products for the home. They both use XPO for last-mile deliveries.

Acquiring XPO would theoretically allow either of the companies to have cut costs and have better control over deliveries. Amazon in particular is known to be developing its delivery infrastructure already, building warehouses and amassing planes and trucks.

Ecommerce is a sure fast-growth area, and once Amazon offers more appliances and furniture on its site, the market size for XPO’s specialty will only further increase. As an example of ecommerce’s growth, this year XPO hired 6,000 temporary holiday workers. Last year, the number was only 1,000.

In light of the expected growth of the shipping market, it’s therefore not that far-fetched to consider the rumor that Home Depot may really submit a bid for XPO.

Of course, a great scenario for XPO shareholders would be if Amazon jumps into a bidding war with Home Depot. However, Amazon is busy integrating Whole Foods, a major $13.7 billion deal it just executed earlier this year, so it may be too much to expect another major acquisition.

And from Home Depot’s perspective, although XPO’s last-mile delivery business is something Home Depot would be interested in, XPO is a lot more than just last-mile delivery. Buying XPO would mean a big detour from Home Depot’s core business. Current speculation calls for an estimated price of $17 billion, including XPO’s $4 billion debt. This would mean price of about $105 per share for XPO.

You’ve probably heard of the saying “buy the rumor, sell the news.” Buying the rumor is the fuel behind the recent rally. The danger is if nothing comes of the speculation, the share price will fall back.

The odds of a Home Depot deal looks rather low at this time. After monitoring the situation for several days, we have decided to take the profit.