What I mean is an acquisition is only good for a stock if you pay a cheap price for it. If you look at the value of other potash stocks listed on ASX and TSX, some of which I own, then you will see pretty quickly that they aren't cheap at the moment. So, for FMJ to rise this much means that some people either know that FMJ are acquiring the assets cheap (or put another way, below current market value) or are taking a big punt that they will. I am just saying that I think this is a big ask in the current market, but will be very interested to see if they pull it off.
The reason I am watching this and posting to hear people's thoughts/reactions is that I am worried about the broader implications of this if the acquisition does not turn out to be as amazing as people have gambled on. The last time I saw cash boxes like this bid up to crazy levels was when I worked at Macquarie and other companies like Allco and B&B tried to replicate their model. Lots of people jumped on board blindly and we all know how that ended, but it also coincided with a broader bubble burst.
Before that, it was the dotcom bubble....
So, if people are bidding blindly here without actual inside knowledge, then I fear we are in another bubble and it may be soon time to liquidate my other holdings. This is my concern and why I am following this stock very closely without a position.
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