Why Allied Nevada Gold Corp.'s Shares Popped Today

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 Allied Nevada Gold Corp. jumped as much as 10% after receiving a tender offer.

So what: China Gold Stone Mining Development Limited said it commenced a tender offer to acquire all of the company's shares for $7.50. Management of Allied Nevada Gold responded by saying it doesn't have any indication that the offer is credible, or that China Gold Stone has the resources to pull off the deal.

Now what: It's worth pointing out that the tender offer hasn't gone through a Schedule 14D-1 filing with the SEC, which would be when the offer actually commences. So, there's reason to think the offer isn't going to result in anything, especially by the supposed deadline of January 24. If you're an owner of Allied Nevada, I don't think it's a reason to sell, but I wouldn't expect the buyout to go through, and certainly wouldn't be a buyer on today's bump. Shares will likely fall back to around yesterday's price if the deal is discredited.

A better stock to buy today
Allied Nevada Gold may not be a great buy today, but The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in this special free report: "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

The article Why Allied Nevada Gold Corp.'s Shares Popped Today originally appeared on Fool.com.

Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.