3Com Risk Arb Play

I received the proceeds from the closing of the Sun Microsystems deal today and used the cash to pick up some 3Com Corporation (Ticker: COMS), which is being acquired by Hewlett Packard (Ticker: HPQ) for $7.90 in cash. China is currently initiating a second stage investigation into this transaction, but it’s expected that they will eventually give their blessing. This is spooking the arbs a bit so this is the reason for the wide spread. Right now, the anticipated closing date is the end of April, which gives you a nice annualized return of ~ 24%. Time will tell, hopefully it will not be another drawn out saga like Oracle (Ticker: ORCL) vs the EU Competition Commission.

Sun Microsystems = Done Deal

It’s finally official! Oracle (Ticker: ORCL) has finally closed the Sun Microsystems (Ticker: JAVA) deal (click: here to see the SEC filing to delist the shares). It’s been a long long ride and I’m glad it’s finally over.

Argon ST, Inc. In Play

I picked up a few shares in a “potential deal” stock today, Argon ST (Ticker: STST), Inc at $24.84. This is a defense manufacturer, which is now in play. The company issued a press release yesterday stating that they were “exploring strategic alternatives”. In another words, the company is up for sale. Potentials acquirers include the big defense contractors such as Raytheon (Ticker: RTN), Boeing (Ticker: BA), BAE Systems (Ticker: BAESY.PK) and L-3 Communications (Ticker: LLL). The number floating around is a sale price in the range of $600 to $700 million. The company currently has a market cap of ~ $550 million so you’re looking at a nice premium. Of course, a deal may never materialize, but the probability is pretty high for a deal. I’ve had good luck with defense manufacturers so I’ll keep my fingers crossed on this one.

J.P. Morgan Healthcare Conference

This is a big week for pharma and biotech investors. The annual J.P. Morgan Healthcare conference starts today (click: here) and there will be tons of market moving news. Many companies will provide preliminary 2010 guidance. One company to keep a close eye on is Genzyme (Ticker: GENZ), which presents tomorrow. With so much bad news already in this stock, any grain of positive news will likely shoot the stock higher.

IMS Health Trades

Here’s a quick review of my risk arb trades in IMS Health (Ticker: RX):

11/5/09 Bought 0.5X @ $20.78
11/5/09 Bought 0.5X @ $20.79
11/5/09 Bought 0.5X @ $20.77
11/13/09 Sold 0.5 X @ $21.27
11/17/09 Sold 1X @ $21.36

12/11/09 Bought 0.05X @ $19.92
12/11/09 Bought 0.2X @ $19.93
12/11/09 Bought 0.75X @ $19.88
12/17/09 Bought 0.1X @ $20.58
12/18/09 Bought 0.2X @ $20.41
12/18/09 Bought 1.2X @ $20.49
12/22/09 Bought 0.6X @ $20.93
1/4/10 Bought 0.1X @ $21.03
1/5/10 Bought 0.1X @ $21.02
1/5/10 Bought 0.1X @ $20.97

So far this trade has worked out well and plan on holding until the deal closes. Now I’m thinking about my next play after Sun Microsystems (Ticker: JAVA) and IMS Health closes.

NYT Write Up On Visa

If you’re interested in learning a bit of how Visa (Ticker: V) and MasterCard (Ticker: MA) make their $$$ in debit card transactions, you should check out the New York Times write up: The Card Game – How Visa, Using Card Fees, Dominate a Market (click: here). It really is an eye opener! Hey, I'm not complaining since I have a few shares of Visa and MasterCard, which I plan to hang on for a long, long time…