Why Virginia Commerce Bancorp Shares Popped


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 mid-Atlantic regional bank Virginia Commerce Bancorp popped 13% after disclosing that it would consider putting itself up for sale.

So what: Before the opening bell, the board of directors for Virginia Commerce Bancorp announced that it's initiated a formal review of its strategic alternatives to determine if a sale or merger would help unlock shareholder value. As per the usual lawyer-esque jargon, there's no guarantee that this will lead to an actual sale of the company, however shares have soared as much as 26% over just the past two trading days.

Now what: Now we hurry up and wait, because strategic reviews rarely move quickly, especially for banks. I often discourage the practice of chasing a stock higher that's looking to sell itself to unlock shareholder value, because those moves are often done out of weakness. At 156% of book value, Virginia Commerce Bancorp appears pricey already, so I'm a bit concerned there will be only minimal upside in the stock, even if a buyout is sought and announced. That would be my way of saying I'd be happy to stay on the sidelines.

Craving more input? Start by adding Virginia Commerce Bancorp to your free and personalized Watchlist so you can keep up on the latest news with the company.

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The article Why Virginia Commerce Bancorp Shares Popped originally appeared on Fool.com.

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