Sell Or Hold Tusk Energy?

Feb 10th, 2009 – Comment

Hi Lou, I listen to you every morning on the Oakley show and enjoy your financial commentaries very much. As a listener, what I really like to hear is your advice on current issues. Your commentaries on the auto bailouts and other topics are excellent. And, when you speak about topics where you offer the […]


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Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


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Should I Stay Or Should I Go Now

Hi Lou,

I listen to you every morning on the Oakley show and enjoy your financial commentaries very much.

As a listener, what I really like to hear is your advice on current issues.

Your commentaries on the auto bailouts and other topics are excellent.

And, when you speak about topics where you offer the listener an honest and sometimes brutally honest opinion…on the topic of the day…that is when your audience  connects with you most.

That is your forte my friend.

Keep up the great work!

Here is my question: I own about 5000 shares of Tusk Energy and today I heard they have been offered $2.15 per share. This has been the ONLY good news in my portfolio and I don’t want to screw it up…(it’s in my kids RESP).

I noticed today there was huge volume on the stock and I couldn’t understand why people were buying and selling this stock when they have already sold the company.

Should I wait until the proxy vote is sent out to the shareholders or sell?

Am I guaranteed the $2.15 per share and what happens if I hold on to the stock.

Thanks…

Steve

Hi Steve,

Thanks for your support and kind words,they are greatly appreciated.

The offer of $2.15 per share in cash represents a huge premium to the recent trading value of the stock and with 95 million shares outstanding you can imagine lots of shareholders were motivated to take their 141.86% one day gain and hit the exit.

HIT THE BID

Hit the bid

That is one factor that explains the volume. Another is that its likely that Polar Star who has made the $2.15 offer is buying in the market and finally there could be some on the arbitrage side buying to capture the last 3.25% spread between today’s close at $2.08 and the $2.15 offer.

I think as well, many investors went to school on the BCE deal that fell apart, and learned that not all offers close and sometimes its prudent to sell into the market and not wait for the close. Yes you might give up a potential gain if another offer surfaces but ask yourself what would Warren Buffett do?
Buffett has made a fortune getting out early!
Happy Capitalism!
Categories: Energy
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