Thanks again to all members who have shared special situation opportunities. There have been 6 ideas submitted during April and so far all of them are still pending.
Please select one the trades below to cast your vote. The winner(s) will be awarded $1,000. All ideas are listed in the order they have been submitted. I am also sharing quick overview of each.
Only members will determine the winner(s). Selection cannot be changed after submission. One vote per member. Poll will close on next Wednesday (9th of May).
A bet on discount mean reversion between SIRI and the tracking stock. Historically tracking stock has traded at 20% discount and recently the spread has widened to 30% due to factors unrelated to the company. So far the wide discount persist.
Stock and cash merger arbitrage between General Growth Properties and Brookfield Property Partners with 7.5% spread at the time of posting. BPY already owns 34% of GGP and is buying the remaining stake. The spread has widened from 7.6% to 10.6%.
Microcap all cash merger arbitrage with 7% spread. Main shareholder as well as insiders have already agreed to support the merger. Approval from remaining shareholders is still pending (no date set yet), however WGRP would likely file for bankruptcy in the absence of merger, so their approval is quite likely.
Microcap all stock merger between junior exploration companies with 22% spread. Shareholder and regulatory approvals are still pending. Limited / no borrow available for short leg of the trade.
Going private transaction with controlling shareholder / chairman / CEO willing to buy out the remaining shareholders (non-binding proposal) at 30% premium to market prices. Company is located in China. BORN is profitable and trades below it’s cash balance. Company recently changed auditors and is delaying filling of the annual report.
Business division is to be sold for a price equivalent to current enterprise value meaning that investors would be receiving the remaining business (half of current revenues) for free. Regulatory approval of the division sale seems to be the key obstacle as regulators already expressed preliminary skepticism on the transaction.