Why Silvercorp Metals Stock Jumped 12.5% on June 4
Shares of precious metals miner Silvercorp Metals (NYSEMKT: SVMLF) were higher by 12.5% at 1 p.m. Wall Street time on June 4. Since April 27, when the company announced it had agreed to acquire Guyana Goldfields, the stock has been up nearly 40%. The funny thing is, the deal keeps hitting snags, and yet Silvercorp's stock keeps heading higher.
On May 17, Silvercorp and Guyana amended their original agreement to increase the price that Silvercorp would pay because a third party had entered with a better offer. The change was significant, taking the per share consideration from the original CAD $0.60 to CAD $1.30, more than doubling the cost for Silvercorp.
When Silvercorp originally stepped in to buy Guyana Goldfield, it looked as if Silvercorp was getting at least a decent deal, if not a good one, because Guyana Goldfield's shares had fallen materially over the previous year. Silvercorp stock rose. But perhaps not surprisingly, the stock fell over 10% when it had to match the higher offer.
Source Fool.com
