Venoco Shares Skyrocketed: What You Need to Know

Before you go, we thought you'd like these...
Before you go close icon

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 Venoco (NYS: VQ) soared a staggering 40% today after the natural gas explorer agreed to be purchased by its CEO, Timothy Marquez, for about $1.5 billion.

So what: The all-cash deal values Venoco at $12.50 per share and represents a whopping 63% premium to its Friday closing price. Marquez -- who already owns about 50.3% of the company -- was hit with a shareholder lawsuit when he first proposed to take Venoco private last summer, but after an unsuccessful five-month search for better offers, the board of directors have finally approved the deal.

Now what: When you make 40% in one morning, taking at least some dough off the table seems like the prudent thing to do. While a 15% spread remains between the current price and the $12.50 offer, holding out seems a bit risky. After all, with quality shale plays like Occidental and Berry Petroleum still available at decent prices, you should have plenty of places to roll your bet over.  

Interested in more info on Venoco?Add it to your watchlist.

At the time this article was published Fool contributorBrian Pacamparaowns no position in any of the companies mentioned. Try any of our Foolish newsletter servicesfree for 30 days.We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Fool'sdisclosure policyalways gets a perfect score.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners