It’s unusual to see a stock quickly rise above the advertised price of a takeover bid – but that’s what happened recently in 2 stocks, one listed on the NYSE and the other on NASDAQ
Turquoise Hill Resources is a copper stock that recently received a buyout offer from a larger copper company, Rio Tinto, at $26.68/share. Turquoise owns the largest copper/gold project in the world, the Oyu Tolgoi mine in Mongolia. It is a $2.7 billion offer designed to add the remaining 49% of Turquoise shares already held by Rio.
A few days after the takeover offer, the stock continued to trade higher than the original offer of $26.68. This may be because the price of copper has continued to rise and the mine is worth even more. Or maybe it’s because other copper producers are interested and paying attention. Or it can be a combination of the 2.
Whatever the reasons, here Turquoise Hill Resources daily price chart:
You can see how the stock jumped on Rio Tinto news. Note the sudden increase in volume shown at the bottom of the price chart. After a few days at the 26 level at 26.50, take a look at the explosion even higher, all the way above 29 before some selling finally occurs.
Turquoise Hill Resources management says it has received Rio’s offer and is under review.
For another point of view, here the dot and number chart for Turquoise Hill Resources:
The move above Rio Tinto’s takeover bid near 26 is clearly evident on this chart. Note that the “P&F Pattern: Ascending Triple Top Breakout”, dated 3/14, proved to be accurate and helpful.
The other fascinating takeover offer came for Hollysys Automation Technologies, a Chinese technology title that had dropped from 21 in September 2021 to 11 in mid-December. This week, on news that a public company in Beijing had expressed interest in making an offer for the company, the price jumped to 15.75 on strong volume on Monday.
Then, as it became apparent, according to this yahoo news storythat “other suitors” might also be interested, the stock continued even higher, up to near 17.50 before a bit of selling finally showed up.
here is Hollysys Automation daily price chart:
The stock also benefited from the weekend rally in Chinese equities in general.
The Hollysys point-and-figure chart is here:
This “breakout from the bullish triangle of the P&F pattern on March 15, 2022” seems prescient. A close above 17.50 would take the price out of a significant downtrend line on this chart – another bullish development from a price chart analysis perspective, if it occurs.
No investment advice. For educational purposes only.
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