Friday, August 05, 2016

July 2016 Performance

I’m kind of back from a little hiatus and just starting to catch up on things… I’ll start off with a review of the July performance. July was a nice break out month as several merger arb positions successfully closed. The first was Qihoo 360, which closed on July 15th. I built up ~ 40% position in Qihoo 360 and the closing of this merger contributed nicely to the July performance. I initially lost money in Qihoo 360 early on with the short Put positions during the panic selling of the China plays. I re-evaluated the situation when things settled down a bit and regained my conviction to go in big. The second significant merger arb play that closed was Multi-Fineline Electronix, which closed on July 27th. I basically rolled over the proceeds from Qihoo 360 into Multi-Fineline Electronix. I went in big again with Multi-Fineline Electronix as it made up ~ 60% of my portfolio. These positions were the primary contributors to the July performance. I never thought I would go in this big with the China plays, but I could not resist based on the probability of these mergers closing.

August will be a busy month for my other special situation / merger arb plays. First, Wafergen (Ticker: WGBS) (~10% position) is scheduled to release earnings after the bell next Tuesday. All eyes will be on the revenue numbers as this is the key in determining the take out price. Second, I recently initiated a position in Everbank (Ticker: EVER) (~20% position), which is currently in talks with TIAA. I’m expecting an announcement of the deal next week. Finally, indication of interest for Medivation (Ticker: MDVN) (~15% position) is due mid-month so news should be leaking out shortly.

So far August is off to a good start, but we’ll see how things unfold as the month progresses…

2016 Performance Year to Date = +14.93% with the running monthly returns as follows:

January -5.47%
February -3.50%
March +7.51%
April +0.84%
May +6.34%
June -2.6%
July +12.2%


At August 09, 2016, Anonymous Anonymous said...

Hi MT,

Good to see you back on line.

Have you seen WGBS lately? The price ran up prior to the earnings report. The company changed the guidance today after the market close. " the demand for our ICELL8 Single-Cell System remains strong, although the sales cycle is longer than we originally envisaged. Based on all of this, as well as the continued strong performance from our base business, we are revising our full-year 2016 revenues from $12 million to $13 million to now be in the range of $10 million to $12 million."

The stock is tanking in after hours trading to .95 from 1.26. I think this should bring down the per share estimate from $1.5 to about $1.25. Not sure if my math is correct. Do you have a better estimate?


At August 10, 2016, Blogger Money Turtle said...

The guidance was disappointing to say the least... I come up with ~ $1.15 for $10 million and ~ $1.43 for $12 million. I sold a chunk earlier this week, but not enough. I closed out the remainder of my position today.


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