Pitch:
– Bet on a short squeeze to deflate.
– RDBX is undergoing a takeunder at $0.63/share with no minority shareholder approval required and limited/zero equity value if the transaction fails.
– Shares trade at multiples of the offer price due to limited float and the resulting short squeeze. Expensive/not available borrow.
Valuation:
– Take-under price of $0.67.
– RDBX is insolvent and would declare bankruptcy absent this deal.
Exp. gain: 80% down to the offer price of $0.67/share.
Full RDBX write-up (free guest account required):
https://valueinvestorsclub.com/idea/REDBOX_ENTERTAINMENT_INC/1462238146