chris, Ithaca Energy (IAE.V) -- All bets are off on where that stock will go over the next month or so. The volume today was truly massive, but I don't know how to interpret that.
Normally when a company gets a hostile bid and the bid is not accepted (which is more than likely what will happen in this case), the stock sells off to around the price that it was trading at prior to the bid becoming known. However, we are not in normal times.
For example, see what happened with Vaalco Energy (EGY). Granted that was not exactly a takeover offer but it was very similar. There, the hedge fund that was bullying Vaalco ended up giving up the fight, blew out all their shares (or at least enough to get back under 5%), and yet the stock is now trading quite a bit higher than it was before all those shenanigans started! I thought I was being so smart taking down my EGY position when the sparks were flying but now I feel like an idiot.
I believe what happened in Vaalco's case, and what may also happen with Ithaca, is that the process of going through the hostile offer essentially amounts to "free advertising". And since everyone is looking for more energy stocks to buy these days, these laggards that are being exposed are getting new folks buying their stock, that otherwise would never had heard or or paid attention to the stock. |
