A good rumour can provide water cooler gossip until lunch. A really great rumour affects share price just as fast. Such is the case of the BARRICK-NEWMONT story making the rounds.
Canada’s Barrick Gold, the world’s largest gold miner, is about to make a takeover bid for Denver-based Newmont Mining, the world’s second largest gold producer. Well, that’s the rumour anyway, but it has legs. Newmont shares went up as much as 6% but didn’t stay there. Vigorous denials by Barrick officials forced it most of the way back down. Meanwhile Barrick shares dropped 3% on the rumour.
I seem to remember some hoary advice for stock market speculators: Buy on rumour; sell on fact.
If this rumour is replaced with fact, things will be very interesting in the gold industry. We’ll see how much money can be made or lost in that instance.