The optionality on a sale looks close to free, in a business that has been quietly compounding.
This is a solid, profitable, growing business with a clean balance sheet, and cheap valuation. Press reports point to multiple takeover approaches, with talks reportedly running for several months and the board holding out for a price well above where the shares trade today. Several details in the reporting suggest the rumors might be true and that a real process is ongoing.
The timing for a potential sale makes sense. The company has just cleared several multi-year perception overhangs and the business is booming. Meanwhile, the market has barely reacted to the rumors. The stock popped briefly on the news and then drifted back to the range it has held for months. That makes for a good entry point to play the potential takeover, with no catalyst apparently priced in at the moment and downside reasonably protected in the near-term by fundamentals.
This post is for paid subscribers, to continue reading please log in or sign up.