Friday, September 14, 2012

Venoco Another Extension

Venoco, Inc. (Ticker: VQ) announced another extension to obtain financing by October 5th. From the latest updated slide, it looks like they got rid of the VPP sale and increased the 2nd lien loan from $225 to $315 million. So the extension will give more time for Timothy Marque to raise more cash and to appease the bond holders. There has been strong demand for the 2nd lien loan so I don’t see a problem. It’s just going to take some additional time to raise the cash. In any case, I did reduce my position by ~ 60% yesterday by selling shares from $11.75 to $11.85 generating a net gain of 2.13% (~ 54% annualized). This has been one strange merger arb play…

Edit: I sold out of my remaining position in Venoco this morning at $11.69 (cost basis of those shares were ~ $11.94). Risks was just not worth it... My total gain from this trade was 0.43% over a 15 day period (10.32% annualized). Not good, but I still made some $...


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