On December 28, 2012 Helix Biomedix, Inc. held a Special Meeting of Stockholders, at which a proposal to amend the Company's Certificate of Incorporation to effect a 1-for-300 reverse stock split was approved.
This trade went as planned and holders of 299 shares or less were cashed out at the proposed $.60 per share. The September 12, 2012$.24 entry price provided a great annualized return. The deal was small but spread across multiple accounts was worth the time.
One of the most interesting aspects of this deal was the price action of the common between announcement and completion. Traders that waited to enter would have been rewarded as the stock traded as low as $.08 before the split was effected. The ability to trade or enter enhanced 13e3 arbs has been an area of focus for me. In my analysis of many of these deals I have noticed patterns in the behavior of traders doing the arb and the investors that are either liquidating positions to get below the threshold to get paid out or have no interest in continuing ownership in a company that "goes dark". After a 13e3 deal is completed companies are no longer making filings and liquidity in the stock is very limited. The battle between new long positions of 299 or less and liquidations by investors can create trading opportunities and improved entry points.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.