Tuesday, May 17, 2016

Bought Nanosphere, Inc.

Today, I picked up some Nanosphere, Inc. (Ticker: NSPH) at $1.31 (~8% position). This company is being acquired by Luminex (Ticker: LMNX) for $1.35 in cash via a tender offer. This deal should close quickly and I have modeled a close by June 30th. I will be looking at a potential net gain of 3.05% (~24% annualized return) if this deal closed by the end of June.

Friday, May 13, 2016

Jiayuan International = Done Deal

It’s nice to see that Jiayuan.com International (Ticker: DATE) finally closed. I went in big yesterday with an average price of $7.417, which made up ~ 45% of my portfolio. My net gain will be 1.25% (50% annualized gain assuming the cash hits my account on 5/20). I patiently wait for these types of scenarios to develop where the odds are heavily in my favor so I can go “All In”. Now I can focus on some new names and get ready for next week…

Bought WaferGen Bio-systems

I picked up some WaferGen Bio-systems (Ticker: WGBS) today at $0.90 (~ 1.8% position). This company is being acquired by Takara Bio. I’ve never seen this type of deal before in which the final price paid will be based on WaferGen Bio-system’s 2016 revenue. I did a quick back of the envelope calculation and I think the final price can be $1.50+ based on the companies projected 2016 revenue guidance of $12-13 million. Am I missing something? This deal will close in February / March 2017.

Jiayuan.com Almost There...

Jiayuan.com International (Ticker: DATE) filed their annual report (Form 20-F) with the SEC today and in that report it states that “The Group expects the proposed merger to be closed on May 13, 2016.” It looks like today will be the last trading day for Jiayuan.com. This was certainly one wild ride, but the end is finally in sight.

Thursday, May 12, 2016

Bought Jiayuan.com International

I spent today buying Jiayuan.com International (Ticker: DATE) (currently ~40%+ position) at an average price of $7.42 (buyout price = $7.51 taking into account of the $0.05 ADR fee). It looks the company is finally scheduled to complete the going private transaction on May 16, 2016. Yesterday, the company filed notice with NASDAQ for the termination of the ADR program effective on May 16, 2016 (click here).

Tuesday, May 10, 2016

A Small Arb Play - Morgan Hotel Group

I picked up small position (~2% of portfolio) in Morgan Hotel Group (Ticker: MHGC) today at $2.10. The hotel chain is being acquired by SBE for $2.25 per share in cash. The company is guiding for a Q3 / Q4 close. Based on that guidance, I would model a close by October (hopefully sooner!). My potential gain would be + 7.14% over a 6 month period (~14.95% annualized return). There is a good possibility that this deal can close sooner than October. The nice arb spread maybe attributed to its small market cap, which is avoided by most of the large arb funds.

Thursday, May 05, 2016

April 2016 Performance

April was another challenging month with many of my long term positions heading south such as Apple (Ticker: AAPL) and Vertex Pharmaceuticals (Ticker: VRTX). The only bright spot was the closing of ADT in which I short a bunch of Puts and the continued strength of Constellation Brands, which has now grown to ~ 30% of my portfolio. I still managed to pull off a gain of +0.84% for the month of April.

I started to de-risk my portfolio by closing out my short Put position in Qihoo 360 (Ticker: QIHU) generating a loss of 33.13%. Something just doesn’t feel right so I decided to get out. I had an oversized position and didn’t want to risk a blow up. Short Puts is generally a very profitable strategy, but a blowup will vaporize you. This was observed in Alere (Ticker: ALR) in which I was able to get out early and prevented substantial losses from building up. So with short Puts, I will try to close out my position quickly if the position turns negative.

I also closed out my position in Sparton Corporation (Ticker: SPA) generating a loss of 7.56% as this hit my loss limit. I will re-evaluate…

The most important rule I keep in the back of my mind is to manage losses. Taking profits is the easy part…

I continued to add to my Medivation (Ticker: MDVN) position, which currently makes up ~ a 9% position and looking to add on any pull back. It looks like Sanofi (Ticker: SNY) is using the Genzyme play book, but the difference with this one is that you have a bunch of other companies: AstraZeneca (Ticker: AZN), Pfizer (Ticker: PFE), Novartis (Ticker: NVS), Amgen (Ticker: AMGN) and ???) interested in Medivation. With the Genzyme acquisition, there were no other interested parties so Sanofi had all the leverage to negotiate an attractive price. I can see Medivation getting top dollar in a sale…  

2016 Performance Year to Date = -1.10% with the running monthly returns as follows:

January -5.47%
February -3.50%
March +7.51%
April +0.84%

Thursday, April 28, 2016

DreamWorks, Medivation and Sparton

Wow, just when I thought M&A activity would diminish this year, we have a nice uptick just this week.

First we have Comcast Corp. (Ticker: CMCSA) acquiring DreamWorks Animation (Ticker: DWA) for $41.00 in cash. I initiated ~ 3% position at $31.57 yesterday based on the chatter over the weekend. I definitely didn’t expect a deal to materialize this quickly, but I’ll take it…

Next we have Medivation (Ticker: MDVN), which is being stalked by Sanofi. It definitely looks like Sanofi (Ticker: SNY) is prepping to go hostile on Medivation. I currently have a ~ 5% position at $49.82. I do believe that Sanofi will ultimately get Medivation, which will fit nicely with Sanofi’s Genzyme division.

Finally, I initiated a small position (~2%) in Sparton (Ticker: SPA) at $21.70. This small cap defense company is evaluating strategic alternatives of its biz and has decided to put itself up for sale. If a bid materializes, I can see this company gets taken out in the 30’s. If no bid, the company valuation is cheap with limited downside and should do fine over time.

EDIT: I took my profits in Medivation today at $56.36 generating a net gain of 13.10% over a 15 day period.

Wait, I changed my mind... I'm back in at $56.28...

Friday, April 08, 2016

Some Cleco

Here we go again with more Cleco (Ticker: CNL) drama. The stock took a little dive today when The Alliance for Affordable Energy requested a rehearing for April 28th regarding the Cleco merger. I highly doubt this will reverse the Commission’s decision on the merger. It’s just a last ditch attempt to for this group to drum up some noise. I believe there is a very very high probability that this deal closes in April. I initiated a ~ 5.5% position in Cleco today at $54.88 (buy out price = $55.37).