Hey Blog Followers,
Though I was in the middle of writing a three part catalyst-driven series (this article being the third), I am going to veer of that path largely because the third idea I had - TURN - isn't really a large position for me and it's not so exciting at the moment.
However, I did want to share a quick idea and put in a shameless plug.
First the plug - follow me on Twitter @retailsedge. Sometimes I'm not able to share more in depth articles due to time constraints or just not being so down to write a long write up. Instead, I like to share quick threads on Twitter - mostly regarding small, special situation ideas. One such thread I shared is this quick odd lot tender offer play worth noting:
SCHL is tendering a bunch of shares using a Dutch tender between $35-$40. After the tender was announced the stock rocketed up to $39.80. I guess the market was pricing in the idea that most owners will get access to the tender at $40. It's hard to say what the final price of the tender will be, but I think odd lot tenders will be okay here. Due to the recent sell off from the market, SCHL is now trading at $37.50. If you buy 99 shares and tender at $39 or $40 I think you'll get fully filled and not prorated. It's not a rock-solid theory because it's not really based on anything fool proof, but I'm taking the plunge and buying 99 shares in a couple different accounts. If I'm right I'll end up making between $200 - $300 on a $3,700 investment. Not bad for a two week investment. If I'm wrong I'll probably end up losing a couple hundred due to the pro-ration (or is it prorating?) and the subsequent drop of the stock to the high $20s/low $30s range.
It could totally backfire because the tender is only for 6.5% of shares outstanding, but I'm hopeful! If shares head to $39+ over the coming two weeks I'd definitely sell rather than take the risk for a $40 tender.
We shall see. Good luck!
I also want to take a minute and congratulate anyone who was in the PEGY trade with me. I was a buyer starting at $3 all the way down to $0.80 and the shares subsequently rocketed to $7 on retail buying pressure and overall solar excitement. I've exited the stock with a substantial gain - hopefully you all made some money too. I'd consider re-entering, but they announced in their annual proxy that they want to increase their ability to sell equity. If that happens all of the preferred shareholders will get a totally new strike at a much lower price (which would be devastating to existing shareholders). I hate the growth at any price strategy. I'll be following closely for the time being.
Also, check out this article on $BMTX. It's my largest holding at the moment and I think this author does a fantastic job talking about the story here. I think shares could legitimately double in a couple months.
Have a nice weekend everyone,
Josh