Why Allied Nevada Gold Corp.'s Shares Popped Today

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 Allied Nevada Gold Corp. (NYSEMKT: ANV  ) jumped as much as 10% after receiving a tender offer.

So what: China Gold Stone Mining Development Limited said it commenced a tender offer to acquire all of the company's shares for $7.50. Management of Allied Nevada Gold responded by saying it doesn't have any indication that the offer is credible, or that China Gold Stone has the resources to pull off the deal.  

Now what: It's worth pointing out that the tender offer hasn't gone through a Schedule 14D-1 filing with the SEC, which would be when the offer actually commences. So, there's reason to think the offer isn't going to result in anything, especially by the supposed deadline of January 24. If you're an owner of Allied Nevada, I don't think it's a reason to sell, but I wouldn't expect the buyout to go through, and certainly wouldn't be a buyer on today's bump. Shares will likely fall back to around yesterday's price if the deal is discredited.

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