Is There Another Bidder For Talbots? TLB Spikes.
What is going on? http://finance.yahoo.com/q?d=t&s=TLB
Urbana Corp. Trades At 55% Of “Readily Ascertainable” NAV
DISCLOSURE: I hold a long position in Urbana Corp. I don’t go around looking for things trading at big discounts to NAV. Obvious “bargains” are usually cheap for a reason, not just stocks. Besides, buying cheap stocks is worse than watching paint dry. They tend to stay cheap because no one ever finds them exciting. … Read more
It’s Options Expiration Day. How Did I Do This Month? How Am I Doing This Year?
Most money managers calculate their performance at the end of a month or the end of a quarter or the end of a year. Since I have been trading options so much, I think a good time to calculate my performance is every options expiration day. This is always an exciting day for me because … Read more
The Talbots Inc. (TLB): Risk Arb
It doesn’t seem like there have been too many risk arb deals this year. Is that why the market is doubtful of the deals that are going on? Sycamore Partners is offering to buy every TLB share for $3. That works out to a 15% premium to the last trade price. Selling puts seems like … Read more
Selling insurance and lottery tickets at the same time
“Even complex derivatives not imagined in an earlier era can be scrutinized with the value investor’s eye. While traders today typically price put and call options via the Black-Scholes model, one can instead use value-investing precepts—upside potential, downside risk, and the likelihood that each of various possible scenarios will occur—to analyze these instruments. An inexpensive … Read more
UNX Energy: Workout Opportunity
HRT Participações em Petróleo S.A. is buying UNX Energy for 0.5579 Global Depository Shares, with each GDS representing 0.01 a share of HRT. HRT last traded at 1,800 Brazilian reals, so each GDS is worth 18 reals. Multiplying this by 0.5579 computes to 10.04 reals. At current exchange rates this works out to $5.91 Canadian. … Read more
Portfolio update coming; Trade like Nathan Rothschild; A reminder of what investing ultimately is
Some time this week I am going to post a picture of my portfolio. A few long positions will be blurred out because I do not want anyone to compete with me in buying them. My portfolio has changed quite a bit from my last update in late November. I sold every single long position … Read more
Current Portfolio (11/28)
LONG (130%) 10% 033780 (KT&G) 10% AAPL 50% “Arbitrage M” 10% (notional exposure) C (short put) 20% CFN 5% GGP 10% GLOI 10% HOLL 5% VOD SHORT (55%) “Arbitrage M” offset 20% BAMM 3% BHP 3% CLWR 3% F 2% FCX 4% FTR 2% GDOT 4% IGTE 3% MCO 2% MOTR 3% NJ 4% OPEN … Read more
GlobalOptions Group common (GLOI): 15% long position at $2.30
I’m going to discuss the liquidation of a tiny ($32 million market cap) holding company named GlobalOptions Group. What the company does isn’t that important anymore since all of its operations are being sold off, but for the purpose of exposition here is a brief rundown: 1. The Preparedness Services unit offers a full range … Read more
CIT Group Put Options (VVFMI / CITMI): Bear Put Spread Opportunity
The premium on January 2011 $1 put options (VVFMI) is $0.75. This leaves the buyer with a maximum gain of $0.25, which he will realize if CIT Group files for bankruptcy, and a total loss if the equity remains intact. Meanwhile, January 2010 $1 put options (CITMI) are trading at $0.55. The simultaneous purchase of … Read more
Do the Six Flags senior unsecured notes present good value?
The general commercial gloom has sent many companies into insolvency, reorganization or liquidation. Where the main issue is poor capital structure instead of operating weakness, there appear to be opportunities for the enterprising investor. One example of this type is furnished by Six Flags Inc., the affairs of which are now undergoing Chapter 11 reorganization. … Read more
South Korea: ADR Pairs Trade
Hedging involves the simultaneous purchase of one security and sale of another, because the first is relatively cheaper than the second. Where the security bought sells at a lower price than the one sold, there must be good reason for believing that the price of the two will come closer together,—and conversely for the opposite … Read more
Section 382 Rights Offerings
Tax law provisions and the operating losses at several corporations have set forth a peculiar round of rights offering. According to Section 382 of the Internal Revenue Code, a company cannot realize the full amount of its deferred tax asset if there is a “change of control” of the business, defined as ownership of more … Read more
Vigorish Forum Now Accessible
By October of last year it was apparent that the securities market had become dislocated. In addition to redemption-related selling by hedge funds and mutual funds, prime brokers had begun to liquidate client accounts that held insufficient margin. The EMH premise that market participants buy and sell assets solely on the basis of economic value … Read more
George Soros: Method of Operation
Source: Michael T. Kaufman “Technically his position was that of an arbitragist, albeit junior grade. In those days, arbitrage meant buying in one market and selling in another, seeking to take advantage of generally small variations in price. As Soros explains it, the idea was to spot a trend and position yourself. “Let’s say you … Read more
