Wednesday, June 08, 2005
Chaucer soars on bid talks
A red letter day today. Not only did Dana Petroleum (my second-largest holding) rise by more than 4% put Chaucer Holdings announced they had received an approach that could see shareholders be made an offer for the company.
This is the dream scenario for an investor. Normally, on announcement of talks shares take a huge step upwards in anticipation of a higher bid. This happened today before the market open, Chaucer marked up almost 12% to 67p to sell versus my purchases at 42.88p and 54.75p. This put me in a clear profit in both trades. The news has also made a huge contribution to returns for the year so far.
Yeee-haaaaa.
The only question remaining is what to do with my holding in the company. Though a bid could be around the corner, if takeover talks evaporate, the shares could fall sharply and I just don't know which is most likely to happen. All you can rely on in this situation is your valuation. My last valuation put Chaucer at 66p. This means I should take the price offered in the market and sell at the first opportunity. But how accurate is my valuation. It's time I did another.
The Artful Dodger
This is the dream scenario for an investor. Normally, on announcement of talks shares take a huge step upwards in anticipation of a higher bid. This happened today before the market open, Chaucer marked up almost 12% to 67p to sell versus my purchases at 42.88p and 54.75p. This put me in a clear profit in both trades. The news has also made a huge contribution to returns for the year so far.
Yeee-haaaaa.
The only question remaining is what to do with my holding in the company. Though a bid could be around the corner, if takeover talks evaporate, the shares could fall sharply and I just don't know which is most likely to happen. All you can rely on in this situation is your valuation. My last valuation put Chaucer at 66p. This means I should take the price offered in the market and sell at the first opportunity. But how accurate is my valuation. It's time I did another.
The Artful Dodger
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