IAMGOLD seeking a potential sale
On May 16, Bloomberg reported that IAMGOLD (IAG) could be exploring the possible sale of all or parts of its business.
According to the report, the company is working with advisers and is in talks with potential buyers for a sale. Citing the people familiar with the matter, Bloomberg also said that the company’s plans could change, and “there’s no guarantee it [will] succeed in selling itself.”
IAG stock performance
After the release of this news, IAG stock soared and closed with a rise of 9.0% at $2.6. Year-to-date, as of May 16, IAG has fallen 32%. It has significantly underperformed the SPDR Gold Shares ETF (GLD) and the VanEck Vectors Gold Miners ETF (GDX), which have fallen 6% and 10% YTD, respectively.
Its first-quarter results were much weaker than expected. The company reported EPS of $0.0, which implied a miss, as analysts had been expecting EPS of $0.01. Its top line of $251 million also missed analysts’ estimate of $278 million. The company has maintained its production and cost guidance for the time being, but it said it might review and update it in the second quarter.
On May 17, IAMGOLD issued a press release commenting on the trading activity in its stock triggered by the Bloomberg report. The company said, “The Company is not aware of any material change that would account for recent trading activity in its stock. The Company regularly reviews strategic alternatives available to it and may engage in discussions regarding potential transactions. The Company will inform the market as required and does not have any further comment at this time.”