Red Hat Arb Play

I’m finally back in the merger arb game. Today, I initiated a position in Red Hat (Ticker: RHT) via Short Puts. It looks like all the regulatory approvals have been received and IBM (Ticker: IBM) has the cash to close this deal. So what’s left?

InflaRx Downgrade?

Huh? SVB Leerink cuts the price target of InflaRx N.V. (Ticker: IFRX) from $67 to $4 because of the poor results from the phase IIb trial for chronic inflammatory skin disorder. The stock is currently trading down ~90% at ~ $3.20 (closed at $37.29 day before). What a gutsy move to downgrade after the clinical results! Seriously!? There are very few analysts, who are good at their job. Majority just follow the herd mentality. That’s why I seldom pay any attention to the analysts calls.

May 2019 Performance

May ended with a big thump as President Trump threatened to impose tariffs on Mexican imports to the US if it cannot control the influx of people crossing the border. This obviously affected one of my larger holdings, Constellation Brands (Ticker: STZ). I do believe calmer heads will eventually prevail and the tariffs will not be enacted. This clearly creates more uncertainty in the market. How can you put money to work in this market when the administration can change the rules in an instant? Really frustrating for investors…

As the previous month, I have no arb / special situations plays right now. Just sitting tight with my long positions (same as previous months) and some cash.

I know, this is a real short post, but there’s really nothing more the add.

2019 Performance = +16.49% with the running monthly returns as follows:

January +7.4%
February +3.7%
March +5.06%
April +7.15%
May -7.90%