Current Price – $6.43
Potential Recovery – $6.73
Upside – $31 for odd-lots
Expiration Date – 30th of November 2017
This idea was offered by Jed.
PCO was covered on the site before (see here) and this trade relates to the same going private transaction (through 100-1 Reverse Split). The only difference is that recently management increased the cash-out price for the odd-lot shares from $6.55 to $6.73.
Odd-lots have a chance to pick up $31 dollars from the sidewalk.
If transaction get’s cancelled, shares are unlikely to drop as company already trades below cash on the balance sheet.
- Book Value per share – $8.54
- Cash per share – $7.65
- Cash out price – $6.73
So larger shareholders (Eagle River owns 35% and has voting power on 70%) are clearly interested in cashing out smaller shareholders below cash value of shares. Which increases the likelihood of transaction going through.