Friday, January 29, 2010

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.

Tuesday, January 26, 2010

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.

Wednesday, January 13, 2010

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.

Monday, January 11, 2010

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.

Wednesday, January 06, 2010

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.

Monday, January 04, 2010

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…