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  • Merger Arbitrage Forum (PART 2) [View instapost]
    pure speculation but that's what I think (silence). They didn't even bother to throw out 'end of 2015' that I saw.

    5/18 recent peak coincides w the article about the DOJ interviewing hotel booking sites. Not sure why that would be a surprise. Typical to reach out to competitors or frenemies in an industry during a 2nd. OWW sold off after that.

    Not much put action today on new post deal lows.

    BTW several K more aug 12c traded last week and it's finally down to .05 ask. Finally. GLTA, AT
    May 27, 2015. 09:32 PM | Likes Like |Link to Comment
  • 8% Yield With Interest Rate Protection From PennantPark Floating Rate Capital [View article]
    Those are all very valid points...if I was looking for a LT hold.

    If I'm going to flip out of the stock fairly quickly the difference between 4.70 basis and somewhere north of 5$ on a topper bid is far more attractive. Esp if it's within say 90d. Say 4% (prob higher) net with zero downside this far into the deal cycle.

    The arbs and 99% of anyone who has bt the stock in the past month is going to take the higher offer and walk away when the deal is done.

    Best, AT.
    May 27, 2015. 11:29 AM | Likes Like |Link to Comment
  • Merger Arbitrage Forum (PART 2) [View instapost]
    the OWW aug 12 calls should be worthless, or sell at .05 by appointment only. However, every day someone is coming in and scooping up 1-3k contracts at .10 with an open interest around 84k contracts.

    It's a tiny number in absolute $ but someone is paying (and taking risk on the sell side) to build a position that promises to end up worthless.

    the deal could break and the stock could run higher but that is 2 things that have to go right (plus timing) to make a penny here. Any of you old hands have an idea?? AT
    May 22, 2015. 12:41 PM | Likes Like |Link to Comment
  • Still Money To Be Made In DirecTV-AT&T Deal [View article]
    BTW- if you are a fraud analyst you will get a hoot out of some of the odd trading in deal stocks. Lots of info leaks at strange times. To my knowledge the SEC has never prosecuted anyone after a deal is announced. You will see sudden moves prior to regulatory filings, PR's, conferences, etc.

    Quite likely the SEC staff is too stupid to understand annualized return?

    The subject of inside info is dear to the retail arb's heart because it's visible and unenforced. Best, AT.
    May 21, 2015. 04:41 PM | Likes Like |Link to Comment
  • Still Money To Be Made In DirecTV-AT&T Deal [View article]
    The fund I reference above is a Hedge Fund. I don't have permission to use their name so I can only share general details.

    I don't like any public funds at all. They are horrible.

    In a way it's like a mutual fund trying to ape a long-short strategy. It's just something they are not built to do.

    I think unlevered you can prob do 5-8% easily depending on deal flow. With active management you can bump that a few/several percent depending on how good you are.

    Not something you can do one day a week and dabble in. It helps to be obsessed. Best, AT.
    May 21, 2015. 04:32 PM | Likes Like |Link to Comment
  • Still Money To Be Made In DirecTV-AT&T Deal [View article]
    MERFX frankly is a horrible example if you are interested in arbitrage. They are too big to move in and out of positions and have to maintain liquidity to meet redemptions. Last I checked their expense ratios were off the charts (include commissions!). Also, they cannot use leverage. Arb funds regularly use 2-400% leverage. They hedge out risk via options, CFD's or futures.

    Leverage makes sense when 95 out of 100 deals close, under a Kelly sizing formula. A fund I follow has 2-250% leverage, 11% annualized and a sharpe of 2.3. And DTV is their #1 position at 14%.

    Quality of asset management is paramount.

    It cannot be indexed, period. It cannot be passive.

    Experience tells you when a stock is crashing 2 days prior to close to buy more because your annualized return is north of 100%....or a weak deal gets suddenly stronger and the stock does not move (buy!!). A typical investor will soil their pants because they don't realize this happens frequently..several times a month.

    SSA: great summary of the deal! Best, AT.
    May 19, 2015. 09:56 PM | Likes Like |Link to Comment
  • Apple Supplier OmniVision Offers A 14% Annual Return [View article]
    That date was the outside date cited by the company and lots of articles just recycle a date as an accepted fact.

    Chinese companies are notoriously slow to get through the regulatory approval process so it's possible they could drag it out till then. However, we will not know that until we see them begin to file papers and update their SEC filings.

    Closing by year end is reasonable if they keep things moving along. Best, AT
    May 19, 2015. 09:27 PM | 1 Like Like |Link to Comment
  • Merger Arbitrage Forum (PART 2) [View instapost]
    I'm not, yet. Focused elsewhere and my concern was the price they paid, even using stock. Concerned they equity would deflate (dont recall a collar on the shs,is there?) and impact the play- or another bidder crashing the party. Biotech really is in crazy land now. Prices are fairly easy to rationalize, esp with the talk about the number of orphan/solo product cos shrinking in number and oppty. Best, AT
    PS- MT thanks for getting me refocused on MCGC. Got in last week.
    May 19, 2015. 03:30 PM | Likes Like |Link to Comment
  • Merger Arbitrage Forum (PART 2) [View instapost]
    I'm not in this deal or following it closely but I did note they said 'best' but not 'best and final' prior to least that was the quote I saw....
    May 15, 2015. 02:41 PM | Likes Like |Link to Comment
  • OmniVision Technologies A Top Opportunity In The Merger Arbitrage Universe [View article]
    I was using ISSI as a template for OVTI myself pending additional info on what may be considered sensitive to the various regulatory parties involved.

    FWIW:After the CY higher offer, it was amusing to me that several quotes came out about the ISSI deal being high risk because the Taiwan divestment was seen as difficult to pull off to satisfy regulators. Funny how everyone was silent when the deal first came out. I've noted a lot of bandwagon jumping on the higher offer...likely because there is lots of $ in that strategy at this moment. AT.
    May 15, 2015. 02:39 PM | 2 Likes Like |Link to Comment
  • OmniVision Technologies A Top Opportunity In The Merger Arbitrage Universe [View article]
    Excellent writeup of the deal. Thank you. In a deal with a lot of moving parts you did a good job breaking it down. In my experience, Chinese firms tend to move very slowly to do anything. Even a management led LBO can take several months to close out with decent financing in place.

    And CIFIUS can be suspended to gain more time, correct? That has been a source of frustration the past 1-2 years. Anyone in RVBD (purchased by a PE consortium that included Canadian Teachers??) experienced this extended delay.

    Perhaps the worst part of CIFIUS is the black-box nature of what is going on. Even more than HSR, the companies are reluctant to engage in any discussion at all other than to confirm the process is ongoing. Nexen 2 years ago is a good template for CIFIUS taking an inordinate amount of time...I like OVTI because all the issues create uncertainty which makes for good opportunity. Best, AT.
    May 15, 2015. 11:53 AM | 3 Likes Like |Link to Comment
  • Merger Arbitrage Forum (PART 2) [View instapost]
    Can anyone cite any published info on the AOL premium? Other than a few very poorly written fluff articles there has been zero info out there. Usually at this point you have Analyst X try to rationalize a higher bid using whatever metrics seem to work.

    Instead all I've seen are downgrades and tgt 50$ which is the usual.

    There was a BB interview with Armstrong where he was less than definitive (working for our shareholders to close this deal) about a higher offer.

    However, who would pick a fight with VZ, who can pay for this out of the pocket change found in the sofa?

    SALX at least had a blockbuster product and many wealthy bidders. Here? AT.
    May 14, 2015. 09:00 AM | Likes Like |Link to Comment
  • Merger Arbitrage Forum (Though Any Arb Can Be Discussed) [View instapost]
    if huffpo is worth 1bb, I'd like to see SOTP valuations done on the individual parts. Skimming the SA analyst commentary on the deal this looks fully valued as a whole but who knows if someone wants the content part vs the advertising part? Media can have insane valuations that are apparent only in hindsight.

    52.5c are cheap if you need protection, Tom. Best, AT.
    May 12, 2015. 11:36 AM | Likes Like |Link to Comment
  • Merger Arbitrage Forum (Though Any Arb Can Be Discussed) [View instapost]
    I keep a 1 day, 1 minute stock chart printed on my wall of HSH 3 days prior to close:{"showArea":false,"sh...

    Helps to keep things in perspective. Best, AT.
    May 12, 2015. 08:51 AM | Likes Like |Link to Comment
  • Merger Arbitrage Forum (Though Any Arb Can Be Discussed) [View instapost]
    Spent time last week trying to run down Regulatory filings since they are kind of a PITA with the split. (2 filings).

    Austria FCO is either due or comments end 5/11-maybe a serious objection?. Can't read German. Both German filings are done. HSR was due 5/3 and no further filings that I saw. JP, Kor, Tiw a ? I was really hoping for an update after the vote as they have been sharing zero info.

    Best, AT.
    May 11, 2015. 03:10 PM | Likes Like |Link to Comment