Venoco Shares Skyrocketed: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Venoco (NYSE: VQ  ) soared a staggering 40% today after the natural gas explorer agreed to be purchased by its CEO, Timothy Marquez, for about $1.5 billion.

So what: The all-cash deal values Venoco at $12.50 per share and represents a whopping 63% premium to its Friday closing price. Marquez -- who already owns about 50.3% of the company -- was hit with a shareholder lawsuit when he first proposed to take Venoco private last summer, but after an unsuccessful five-month search for better offers, the board of directors have finally approved the deal.

Now what: When you make 40% in one morning, taking at least some dough off the table seems like the prudent thing to do. While a 15% spread remains between the current price and the $12.50 offer, holding out seems a bit risky. After all, with quality shale plays like Occidental and Berry Petroleum still available at decent prices, you should have plenty of places to roll your bet over.  

Interested in more info on Venoco? Add it to your watchlist.