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 $0.05 ADR fee). The company recently filed to terminate the ADS program with an effective date of 07/11/16 (the last trading day). The potential net gain will be 0.98% (~ 39% annualized gain based on the cash hitting my account by 07/15/16). It’s not much, but it’s as close to free money as you can get…
posted by Money Turtle @ 2:36 PM
35 comments
35 Comments:
What broker do you use to buy these shares MT?
Transaction costs are relatively big with the one I am using, (50$/10K shares, where the return would be 100$, so 50$ net).
And does your broker allow for giving bid prices specified in > 2 decimals ( e.g. 1.0201)
Thanks!
Hi MT,
This is from PR Newswire this morning:
"The parties currently expect to complete the Merger within July 2016, subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement".
Why are they saying "within July", when it s supposed to be completed on July 11, 2016?
Where can we find the filing of the termination of the ADS?
Thanks
I use TD Ameritrade and have a negotiated commission rate of $7.00 per trade regardless the number of shares. TD does not permit limit prices going to more than 2 decimal places.
https://depositaryreceipts.citi.com/adr/notices/previewPdf.aspx?caId=508
The company actually plans to payout on 7/12.
Additional info from Citibank:
https://depositaryreceipts.citi.com/adr/common/file.asp?idf=3749
I need help, options strile 25 PUT on AVG went to 2, which is the reason of 8% yeld? I'm quite scared I sold to 1 and doubled. Please help MT thanks..
25 put december 2016
yesterday were at 0.75 then 1.0 then 1.35 in close now 2.15/2.25 bid.
With no reason this increase. I wouldn't there is some rule where who sell strike price 25 that is the same of buyout price 25 can go in some trouble.
Don't know what to do, it to take loss and close. Please help me.
The september is 1.15 ask so didn't went up, don't know what to thing.
I believe the options may be pricing in some kind of tax consideration (withholding) since AVG is a Dutch company.
oh my god, can you estimate what will happen? I need to decide what to do... I'm full of it 60% of capitals at 1.06 average, can go more up?
please help...
I need to understand where I am now, what I'm risking.
closed at 2.25 50% of my position... now with what i have I will have no loss if I take the premium otherwise I need to take a loss on those too. I hope somebody more expert can help, what a nightmare! and they was selling 10.000 yesterday at 1.00 so how is possible that everybody did such mistakes, and what is the fair value of this option? my god! :( sad day for me.
but 15% on what? on the strike price?
The options may be subject to a 15% Dutch withholding tax. I would look at the example of Biomarin’s purchase of the Dutch company, Prosensa. I'm not an expert with these tax scenarios... Sorry
The OCC circular for Prosensa had the following statement:
On January 29, 2015, Biomarin Falcons B.V. and Biomarin Giants B.V., each of which is a wholly-owned subsidiary of Biomarin Pharmaceutical Inc. completed a tender offer for Prosensa Holding N.V. (RNA) Common Shares. In connection with the tender offer, Prosensa Holding N.V. entered into an Asset Sale Agreement with Biomarin Pharmaceutical Inc. which will be effective on February 12, 2015. Upon completion of the Asset Sale, Prosensa Holding N.V. will make an advanced liquidation distribution to remaining RNA shareholders in the amount of $17.75, less withholdings, plus one non-transferrable contingent value right. RNA shares will be delisted from the Nasdaq Stock Market after the close on February 11, 2014.
NOTE: The advanced liquidation distribution will be subject to Dutch withholding tax, of $2.25 per share. The deliverable of adjusted RNA options will be based on the merger consideration net of applicable withholding taxes. RNA options will not be adjusted to include the non-transferrable contingent value right.
CONTRACT ADJUSTMENT
DATE: February 12, 2015
NEW DELIVERABLE
PER CONTRACT: $1,550.00 Cash (($17.75 less $2.25 withholdings) x 100)
15% would be on the stock price.
ok thank you, so the risk is that the price of the options could arrive to 15% of 25 strike price so over 3.5... I closed all at 2.25 and I took a loss of 5%
I go out to relax... thanks for now
That would be a pretty good profit.
which profit? those options are causing me a loss... we don't know what is going on. AVG PUT 25 DEC 2016
Still in $RAD? Do u put a stop on it?
Eden's a bot.
No longer in RAD...
I am out of RAD as well
Thanks for pointing me to TR Ameritrade MT, I'll take a look.
Typo, meant TD Ameritrade...
MT, how to study this case about the 25 put dec options of AVG? you are so expert, why is so hard to study those cases? who can help us on this?
I guess today may be the last trading day for KUTV.
KUTV was over 1.14 today. I Wonder why anyone would pay $1.14, if they will only get $11.13 for the takeover.
Sorry about the typos in my previous post. I meant $1.04 and $1.03.
It should have read as follows:
I guess today may be the last trading day for KUTV.
KUTV was over 1.04 today. I Wonder why anyone would pay $1.04, if they will only get $11.03 for the takeover.
AVG - Just have to be aware of potential tax withholding with some of the foreign mergers. Need to take a good look at the merger agreement.
KUTV - I tend to see this more with tender offers in which the price spikes above the takeover price. Technical reasons??? I really don't know why it happens.
Hi MT,
Is there any official news on QIHU that caused it to shoot up today?
Is there a way to search https://depositaryreceipts.citi.com/adr/notices to see when an ADR is about to delist? While I can go to your link when you post them, I don't seem to be able to find them through any type of search.
Thanks
Hi
I picked up some CAB buffer fly call sept 50/60/65. Hopefully it gets sold for around 60.
Aapltrader
hi official confirmation of termination of Qihoo's ADS is listed in Bank of New York Mellon. Tomorrow 15/07/2016 is the official date.
btw I read in BNY Mellon document that we get 76.93 and not 76.95 net, because there is 0.05 + 0.02 fee.
today is the last trading day and should delist monday 18 july in before hours, they should halt so monday I think.
Now that QIHU pd., Are there any substitutes?
I sold my QIHU on Friday assuming 76.93 would be the proceeds if I did not sell. My broker ended up charging me the .07 ADR fee just for me having owned it on Friday. I wonder if the guy who bought my shares was also charged the ADR fee?
how do you see JOY deal? any antitrust risk? seem safe and nice deal this one, please let us know what you think and risks..
LXK and IM what do you think of such yelds? do you see any risk? estimated close of the two deals?
Also CKEC new deal seem interesting, but I'm a bit confused, are we able to get 33.06 in cash, or the deal is cash+stock mixed?
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