This morning, Grindrod Shipping (NASDAQ:GRIN) disclosed that it is in “exclusive discussions” with Taylor Maritime Investments (OTCMKTS:TMILF) regarding a potential buyout of Grindrod. This proposed acquisition hasn’t been finalized. Still, traders are deciding to push GRIN stock up to a fresh short-term high today.
Grindrod Shipping is a dry-bulk vessel fleet operator. Perhaps you’ve traded stocks in this category before. If so, then you might know that they’re prone to outsized price movements, sometimes within a single trading session.
Today, the outsized move is to the upside, especially for investors in Grindrod Shipping. Volatility is their friend today, apparently, as Grindrod announced a “non-binding indicative proposal” by Taylor Maritime Investments (TMI) to “acquire the entire issued and to be issued share capital of the Company not already owned by TMI, or a subsidiary or affiliate thereof.”
What’s Happening with GRIN Stock?
Buyout talk tends to get traders on Wall Street excited. So, perhaps investors shouldn’t be too surprised that GRIN stock is on the move today. Shares are currently hurtling an impressive 18% higher, even touching a short-term high of nearly $25 at one point.
Before jumping headfirst into the trade, however, traders may want to read the full press release. We’re not talking about a finalized takeover here. Nothing has been written in stone for GRIN stock.
Remember, “exclusive discussions” can fall through at any given moment. In the release, Grindrod fully acknowledged this fact:
“[D]efinitive terms for the Proposed Transaction have not been agreed upon between the parties […] There is no certainty that any transaction will result from these discussions.”
In other words, the details haven’t been fully hammered out yet and no finalized agreement has been made. Is it possible, then, that traders are getting ahead of themselves?
Only time will tell whether this turns out to be a case of “buy the speculation, sell the news.” For the moment, though, buyers are grinding out a new short-term high as Grindrod shares reach their highest price in a while.
On the date of publication, David Moadel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
