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 Pioneer Southwest Energy Partners (NYSE:PSE) jumped 21% today after getting a buyout offer.
So what: Pioneer Natural Resources (NYSE:PXD) has offered 0.2234 shares of stock per share of Pioneer Southwest Energy Partners. The company already owns 52.4% of Pioneer Southwest and 100% of the general partner so this would just merge the entire company.
Now what: Pioneer Southwest is trading for $31.85 as I am writing, and Pioneer Natural Resources at $137.50 investors have pushed the latter past the offer price. Essentially, traders are betting on a higher offer in the future. At the very least I would take some gains off the table today, because a deal could fall through and there's no guarantee a higher offer will be made.
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Fool contributor Travis Hoium and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.