Special Situation | Old School Value

Puget Energy Merger Approved and Review

Wednesday, December 31, 2008

The Puget Energy merger has finally been approved on December 30, 2008. After more than 1 year since I first got wind of this deal, the entire deal is expected to close in 2 weeks for $30 cash. Surprisingly, PSD is still trading at a discount to its final closing price. It is currently at $27.50. This still leaves room for a 9% gain with all uncertainty eliminated.. In my last post on PSD, let's take a step back and review what happened, how I went about doing things, what went right and what went wrong.

Capital Crossing Preferred (CCPCN) and HealthShares ETF Liquidation

Friday, November 28, 2008

3 Comments

I'm chartering into inexperienced waters with this topic, so I hope people will provide comments if they have experience with investing in actual liquidations. In this post, I'll be discussing 2 liquidations. Capital Crossing Preferred Corporation (CCPCN) and HealthShares Exchange-Traded Funds. Quick Definition For those unfamiliar, a liquidation is a process where a company is brought to an end. It converts all of its assets into cash. That is, they sell all positions in their portfolios, sell their real estate, inventory, desks, chairs and anything else that may have cash value. Remember how the value of a company is the sum of its future cash flows as well as its shareholders equity? In a liquidation, since there is no more future cash flow, a piece of the shareholders equity is what we are entitled to received.

Profit from Special Situations – Risk Arbitrage

Wednesday, November 12, 2008

12 Comments

In part five of the series on special situations, I'll briefly present the idea of risk (or merger) arbitrage. This series is based on the book You can be a stock market genius! so for additional information, be sure to read it yourself.

Community Against Puget Energy (PSD) Merger?

Monday, November 3, 2008

1 Comment

Before I begin, let me start by saying that if you are invested in this PSD arbitrage and feel uneasy about the press Puget Energy has been receiving, I encourage you to sell out. You'll still end up with a profit now and more comfortable nights.

Dr Pepper Snapple (DPS) Spinoff

Tuesday, October 28, 2008

15 Comments

In part four of the series on special situations, I'll briefly present a recent spinoff. Dr Pepper Snapple. This series is based on the book You can be a stock market genius! so for additional information, be sure to read it yourself.

Profit From Special Situations – Spinoffs

Thursday, October 23, 2008

8 Comments

Spinoffs can take many forms but a simple definition can be defined as a corporation taking one of its subsidiary or business division and then separating it to create a new company. A spinoff usually occurs because the company wants the public to fully recognize the underlying assets of the division and to get a better valuation of the whole company. The newly created company is then valued by the market independently.