Thursday, July 07, 2016

Some KU6 Media Co.

The current M&A environment is very challenging so you have to be nimble and take what you can get. Today, I picked up some KU6 Media Co., LTD. (Ticker: KUTV) at $1.02 (~ 5% position). This is a thinly traded stock and I wasn’t able to build a full position. Anyways, this is one of those China going private plays that will be closing very soon. The buyout price is $1.03 ($1.08 minus the $0.05 ADR fee). The company recently filed to terminate the ADS program with an effective date of 07/11/16 (the last trading day). The potential net gain will be 0.98% (~ 39% annualized gain based on the cash hitting my account by 07/15/16). It’s not much, but it’s as close to free money as you can get…

Tuesday, July 05, 2016

June 2016 Performance

June was a strange month as you were near new highs and then Brexit hit the market. The positive for the month was the closing of the Nanosphere acquisition by Luminex. I guess there was one other positive…  the nice earnings report from Constellation Brands, which I continue to hang on for the long term. Those two pretty much sums up the positives for the month.

M&A continues to be challenging as I wait for several deals to close. I have built up a position in Qihoo 360 (Ticker: QIHU) and based on the guidance by the company, this deal should close by mid-August. I like the odds of this deal closing, but it is a China acquisition so there’s going to be some doubt.

I’m also involved in the Medivation (Ticker: MDVN) special situation play. I initially entered this position based on the hostility by Sanofi (Ticker: SNY), but as I learn more about this company I actually like it as a standalone basis. I wouldn’t mind if Sanofi walked as I agree with the company that there is significant value creation ahead by expanding the indication of Xtandi and its potential pipeline. So it’ll be interesting to see how this plays out.

That’s it for June…

2016 Performance Year to Date = +2.43% with the running monthly returns as follows:

January -5.47%
February -3.50%
March +7.51%
April +0.84%
May +6.34%
June -2.6%

Wednesday, June 22, 2016

China Ming Yang Wind Power Group = Done Deal

China Ming Yang Wind Power Group (Ticker: MY) closed today as expected. There were clear indications since early last week that this deal was going to close today. The company filed with their ADR sponsor for the termination of their ADR program on June 13th. My net gain from this arb play will be 1.58% (annualized gain of ~ 48% assuming the cash hits my account by 6/27). This position comprised of ~ 17% of my portfolio. Now, let’s see when Qihoo 360 (Ticker: QIHU) will close…

Wednesday, June 15, 2016

Bought China Ming Yang Wind Power Group

Yesterday, I initiated a position in China Ming Yang Wind Power Group (Ticker: MY) at $2.42 (~ 14% position). This company is being acquired for $2.46 (after subtracting the $0.05 ADR fee from the buyout price of $2.51). The company recently notified Citibank (their ADR sponsor) that they are terminating the ADR program as of June 23rd (click here), which I expect to be the last trading day. I am modeling that the cash will hit my account by June 27th, which would equate to a net gain of 1.65% (~ 42% annualized return).

Thursday, June 02, 2016

May 2016 Performance

Well, it’s a nice to be finally in the green for the year. A good portion of the positive performance in May can be attributed to the various special situation / merger arb plays. For example, I got lucky with Nanosphere (Ticker: NSPH) in which there was a nice bump in price as another bidder came knocking on the door. In addition to Nanosphere, I am currently in the following special situation / merger arb plays: DreamWorks Animation (Ticker: DWA), Medivation (Ticker: MDVN), Qihoo 360 (Ticker: QIHU), Morgan Hotel Group (Ticker: MHGC), WaferGen Bio-systems (Ticker: WGBS), Krispy Kreme (Ticker: KKD) (short puts) and Cabela's (Ticker: CAB), which I just initiated this afternoon after checking out a write up from the NY Post.

I do not remember a time in which there was so much M&A activity occurring in a single month. In the start of the year, I envisioned that M&A would be subdued for 2016, but I’m glad to be wrong.

Now it’s just watching the grass grow as I wait for these positions to close…

2016 Performance Year to Date = +5.17% with the running monthly returns as follows:

January -5.47%
February -3.50%
March +7.51%
April +0.84%
May +6.34%

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 closes 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.