Walter Energy Shares Popped and Dropped: What You Need to Know

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 Walter Energy (NYS: WLT) jumped 10% briefly today on more buyout rumors.

So what: Yesterday, shares jumped on a report out of London's Independent that BHP Billiton (NYS: BHP) or Anglo American were preparing bids to buy the company. Today, Australia's newspaper The Australian stoked the fire and continued yesterday's speculation.

Now what: There wasn't a lot of new information in The Australian article, so investors buying on that news are a little late to the party. But like I said yesterday -- buying simply on rumor is a terrible way to invest.

Analysts did react last night and don't seem to think the Walter/BHP deal makes a lot of sense; shares have been selling off all day. The euphoria is starting to die, and I don't see shares holding at elevated levels unless a deal is actually announced.

Interested in more info on Walter Energy? Add it to your watchlist byclicking here.

At the time this article was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.Motley Fool newsletter services have recommended buying shares of Walter Energy. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.

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