David Addison
Natural resources, oil & gas, value, event-driven

Shareholder Rejection Of Yongye's Buyout Offer: Boon Or Boondoggle?

The last two weeks have been eventful for shareholders of Yongye International (NASDAQ:YONG). On Wednesday, 19 February, theStreet.com reported that Yongye had postponed the vote on the buyout, ostensibly to garner more shareholder support. At the time, shares were trading at around $6.57, representing a paltry 1.82% risk premium versus the buyout price of $6.69. The January 15 expiry $7 calls were priced at $0.05, representing a 6.84% expected annualized standard deviation under Black & Scholes' pricing assumptions. Clearly, even in spite of evidence to the contrary, the market thought that the deal was "a sure thing". This was not to be the case. On Wednesday, 5 March, Yongye announced that the going private proposal had not...

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
FREESA PRO MEMBERS
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO."Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else."Patrick Rice, Mainstay Capital Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details