Wednesday, April 01, 2020

Jumei International Holding


I took a small stab at Jumei International Holding (Ticker: JMEI) (~ 2% position @ $19.50). This is one of those going private China plays for a takeout price of $19.95 ($20 minus $0.05 ADS depository fee). The tender has been extended to April 8th. From what I can gather, they have sufficient votes already tendered and financing is in place to meet the conditions for closing. For some reason, even though the tender expires on April 8th, my broker’s tender deadline is today. The odds look good for a closing next week, so we’ll see…

2 Comments:

At April 02, 2020, Anonymous Anonymous said...

MT,

I do not know you from a hole in the wall but for the most part you seem like a honest good guy. Jim Chanos a famous hedge fund short seller said today, he would avoid all Chinese stocks like the plague. He may have said that before, but has a better reason and conviction today. As investors we have all never seen a current environment like we have today. In my humble opinion your position even though small in JMEI is like going after nickels on a train track. Please be smarter than that.

Consider selling deep in the money Calls for V and MA. Not near term farther out in time = more premium in mark price. Why? You collect cash now and premiums over current price. If you are under cost now, this is harder or a savior.

Be patient like the rest of us and focus on pure quality stocks only. USA based only, lots of cash, very little debt and companies with CEO's in place, no coronavirus tested positive CEO's. You will learn soon why.


Good Luck to you and all others.

Thanks

 
At April 02, 2020, Blogger Money Turtle said...

Yes, I share the same concerns with China based companies. The odds are actually very favorable with China going private plays that have definitive agreements in place. They almost all close when they get to this stage. With Jumei, they have already met the major conditions for closing (financing in place and minimal number of shares tendered). As they say, it's not over until the cash hits your account.

Visa is currently my largest position and do plan on adding. Thanks for sharing your strategy in selling deep in the the money calls.

 

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