Please ensure Javascript is enabled for purposes of website accessibility

Why New Gold Inc. Shares Jumped 19% Today

By Travis Hoium - Sep 12, 2018 at 10:58AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Sometimes a change at the top will jump-start a stock.

What happened 

Shares of miner New Gold Inc. (NGD 3.74%) jumped as much as 19.4% in trading early Wednesday after the company announced a leadership change. Shares were hitting their high at 11:05 a.m. EDT and seemed to be gaining momentum.

So what

New Gold announced that CEO and board member Raymond Threlkeld has resigned and will be replaced by Renaud Adams, who will be president and CEO. Adams led Richmont Mines from 2014 to 2017, when the company was acquired by Alamos Gold. Investors might be thinking a buyout is now the goal of New Gold long term. 

Gold nuggets on a piece of raw wood.

Image source: Getty Images.

Threlkeld had only been CEO since May, but presided over a second-quarter earnings report that saw a large reduction in production guidance and a rising cost of production. Investors clearly weren't thrilled with his tenure.

Now what

Two CEO changes in a year are unusual, but for now, investors seem to like the move. There wasn't much detail given on Threlkeld's decision to leave the company, where he has been on the board since 2009. 

We also know very little about what Adams will do at the company to change course. Even though there isn't a fundamental driver of New Gold's jump today, sometimes investors like to see a change at the top of a company that's struggling, and that seemed to be enough to push shares higher today. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

New Gold Inc. Stock Quote
New Gold Inc.
$1.11 (3.74%) $0.04

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.