The below listed special situation opportunities are currently included under Active Ideas. Further details on each of these opportunities are available for members only .
Recent examples (expired ideas) include Exchange Transaction with guaranteed $2700 in a month, Merger Arbitrage with 200% return in a month, Reverse Split with 50% return in a week, Tender Offer with 9% return in a month.
Merger Arbitrage – 44% upside
An investment company that is trading significantly below NAV. Its portfolio is comprised of listed securities and thus NAV is easily observable. The investment manager of the company expressed interest to acquire it at significant premium to current share price.
Merger Arbitrage – 25% upside
Couple parties have expressed the interest to acquire the company at significant premium to current share prices. The buying opportunity has been created after this company delisted from the main stock exchange due to late regulatory fillings and started now traded OTC. Forced selling caused a sharp share price drop. The potential buyers have expressed their full awareness on the situation causing late fillings and the acquisition offer is still on the table.
Arbitrage Transaction – 5% upside
Closed end fund (CEF) that historically traded at 5% discount to NAV. Over the recent month share price jumped up and the fund is currently trading at a premium. The expectation is that discount will revert to historical levels in ST. Exposure to NAV can be hedged by shorting ETF with a very similar portfolio composition.
Merger Arbitrage - 50% upside
65% of this company has been recently acquired and the acquirer expressed intention to buy out the remaining public shareholders. The company currently trades at significant discount relative to the price at which 65% of its shares were acquired and also at discount to its fair value. Shareholders collect a very safe 8% dividend while waiting for the transaction to occur.
Liquidation – 66% upside
The company has recently sold all of its RE assets and currently its balance sheet is comprised of cash and investment securties. Following liquidation of assets management expressed intention to return certain portion of cash to shareholders. Thus a significant special dividend or tender offer is expected to bridge the gap between NAV and the share price.
Liquidation – 53% upside
REIT which is in liquidation mode – management has plan to sell all of the remaining assets and close the company after distributing proceeds to shareholders. The company trades at material discount to NAV despite the fact that so far portfolio properties have been divested at or above NAV, NAV is supported by 8% gross rental yields and the company remains cash-flow positive and continues to grow NAV per share.
Expected Tender Offer – 80% upside
Strategic investor announced intentions to invest in this company and following the investment to launch public tender offer at 100% higher price relative to where the company is trading currently. If the strategic investor continues with this plan, the gap between the expected tender price and current share price is likely to narrow significantly.
Liquidation – 30% upside
Company that is in liquidation mode and is expected to be liquidated within a year. A number of external valuations indicate materially higher liquidation value than the current share price. Management responsible for liquidation has great track record in similar situations and is highly incentivized to maximize returns for shareholders