March 2016 Performance
Not really much to report…
March was one of those months where
it didn’t feel like the market really rallied at all. The biotechs continued to
get hammered and was not able to participate in this rally. I was surprised
that my portfolio was able to generate a ~ +7.5% return for March, which can be
partly attributed to the closing of Keurig Green Mountain. Many of my long term
positions such as Visa (Ticker: V) and Constellation Brands (Ticker: STZ) rebounded from the January /
February lows. I did
take a small hit on my Alere (Ticker: ALR) short Puts and my position in Vertex Pharmaceuticals (Ticker: VRTX).
In terms of my merger arb plays, I
currently have short Puts on ADT (Ticker: ADT), Youku Tudou (Ticker: YOKU) and Qihoo 360 (Ticker: QIHU). I anticipate Youku Tudou and Qihoo 360
closing in April. Hopefully, these short Puts will expire worthless.
So I’m still playing things very
conservatively…
2016 Performance Year to Date =
-1.93% with the running monthly returns as follows:
January -5.47%
January -5.47%
February -3.50%
March +7.51%
posted by Money Turtle @ 3:49 PM
17 comments
17 Comments:
when close the QIHU deal? i see few info here, it's still a bit risky I think.
Hope u go in some $VA...
Aapltrader
QIHU should close in the next few weeks...
I'm on the sidelines on VA. Good Luck on Monday...
Hi MT,
How confident are you on QIHU? There is close to 2% remaining on it. If it closes in the end of April with high level of certainty that's a pretty nice return for less than 1 month. Does it deserve a high allocation? Also, will there be any ADR fees on this one?
Thank You
For QIHU, it's just finalizing the closing conditions. It's a large consortium taking this one private so it may take a little time to finalize. There is a $0.05 ADR fee. Allocation all depends on your risk profile, I have a decent position and have been playing this with Short Puts.
why we pay a 0.05 fee in a transaction like this?
also on YOKU then?? 0.05?? so it's better to sell on the market at 27.55?
Yes, YOKU also has a $0.05 ADR fee. I closed out my position in YOKU. Not much left in it...
It's just one of those fees charged by the ADS Depositary for cancellation of the shares at closing. In a few instances, the acquirer has taken on the $0.05 fee, but it's rare...
what means it's rare? if today they announce the close in 2/3 days, for example, youku will quote 27.58/59 probabily, or won't be able to pass 55/56 because of the fee will make a loss to pay more than 27.55?
I mean when they announce the definitive deal, the acquirer will state that they will absorb the $0.05 ADR fee. In the case of QIHU and YOKU, the acquirer will not be absorbing the $0.05 ADR fee (QIHU and YOKU shareholders will pay).
ah ok, and where you have read about this? you read the agreement?
I sold at 27.55 yoku now... hope will not go to 27.59....
This was from the YOKU filing:
"...each ADS issued and outstanding immediately prior to the effective time of the merger (other than any ADS that represents Excluded Shares) will be cancelled in exchange for the right to receive $27.60 in cash per ADS without interest (the "Per ADS Merger Consideration") (less a cancellation fee of up to $5.00 per 100 ADSs (or any fraction thereof) pursuant to the terms of the deposit agreement..."
Hi MT,
Back in January you were in BXLT. Based on the current prices it is showing a potential return of ~16%. Have you taken a second look at it? Do you think the deal will go through?
I'm no longer in BXLT. Shire is re-affirming their commitment to this deal. I believe that this deal will eventually get done, but you never know since the Fed is constantly changing the rules...
Good to be conservative in times of uncertainty.
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