Yesterday after the close it was announced that Mariana Resources (TSX-V:MARL) is being snapped up in a business combination which values $MARL shares at a roughly ~75% premium to yesterday's closing levels. As of the last trade Venture traded MARL shares are trading up 62%:

MARL.V (Daily)

I was a MARL shareholder at the close yesterday (since mid-March) and I exited shortly after the open this morning because i'm not terribly interested in being a Sandstorm shareholder. Not because I have anything against Sandstorm but simply because I see so many better opportunities in which to deploy this newly found cash. 

I would like to point out several items of note regarding the above MARL chart:

  • Notice how shallow the pullbacks were during MARL's strong advance during 2016, and before the December 2016 decline dips were contained by the rising 50-day moving average.
  • The strongest stocks won't give many opportunities for investors to get in "cheap."
  • The January 2017-March 2017 correction found support at exactly the 50% retracement of the April 2016-January 2017 rally.
  • The recent dip found support at exactly the C$1.00 'psych' round number level which also happens to be the 38.2% Fibonacci retracement of the April 2016-January 2017 advance.
  • Judging from the recent price action I must commend Sandstorm and Mariana for being tight lipped and keeping a lid on leaks of this transaction. 

Another point of note is that the takeover premium is slightly above Mariana's 52-week high. 10%-20% above a stock's 52-week high seems to be the going rate for takeovers, we saw a similar takeover premium with Exeter Resources (TSX:XRC) and Goldcorp recently. 


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