Eldorado Gold (NYSE:EGO) has suffered some unexpected backlash when they were suddenly outbid by Goldcorp (NYSE:GG) for Andean Resources (TSE:AND).
Most of the fallout from the lost bid is in the rumor mill, more than anything else, and it didn't help that they were named the fastest-growing company by Fortune, when that isn't the case.
That invited intense scrutiny, which combined with the rumors, has seemed to hold the share price of the company down.
After the failed bid, the market was looking for Eldorado to attempt to snatch up other companies, which didn't work out, and they're pointing to organic growth instead rather than acquisitions going forward.
That created the problem of higher expectations in the market place, which, again, is holding down share price.
While open to the right acquisitions, the loss of the bid to Goldcorp showed the lack of financial power to make a good deal. CEO Wright sees possible acquisitions in a couple of years, rather than sooner.
That's probably due to the fact there will be consolidation as larger miners grab up the top assets as gold prices surge and the deals make sense.
Eldorado will be left with less desirable assets to look at, but still potentially very profitable ones.
The ultimate backlash in all this is Eldorado was seen as what they are, a smaller player in the big gold pond. That's not necessarily bad, but it is concerning short-term share price, which will have to work its way thorough lowered expectations.
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