Dark Side of the Street (Edition #16)
NFL Draft Thoughts, Top Movers, Top Micro Purchases, and More!
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“The harder you work, the harder it is to surrender.”
-Marv Levy
Thought of the Week
Las Vegas hosted the NFL Draft this weekend. Of course, I turned the 1st round on to see who my Buffalo Bills would select. I’m always amazed to see crazy fans going nuts on TV, thinking that a bunch of rookie players will dramatically improve their teams’ roster.
The draft is the sports version of investing. Each team pays many people a lot of money to do ‘talent evaluation’ year-round. And then, when the draft occurs, each team picks the best player available (well, that’s how it’s supposed to be, some teams tend to get it wrong more than others… *cough the Jets *cough). But the payoff usually doesn’t occur for 3 - 5 years. My team picked Josh Allen in 2018, and he didn’t become ‘elite’ until 2021.
As an investor, we need to perform the ‘talent evaluation', but there is a lesser-known timeframe of when the payoff will occur. I believe that in investing, we pick the time horizon that we are willing to allow for our thesis to reveal itself. But, if our thesis does not prevail, we need to be humble enough to suck up our losses and move on. Just the same as Cleveland has done with the last 20 years of quarterbacks.
Recent Insider Buying
Recently Completed Spinoff Purchases
Large Micro Cap Purchases
Top News of the Week
“NCR jumps on report of multiple buyout interest” - By Joshua Fineman of Seeking Alpha
“Fortune Brands Shares Rise 7% as Company Plans Spinoff” - By Stephen Nakrosis of MarketWatch
“AGCO to Pay $4.50 Special Dividend in June, Boosts Quarterly Payout to 24c” - By Josh Beckerman of MarketWatch
Top Micro Cap Movers this Week
Top 10 Gainers
Top 10 Losers
Special Situation Watchlist
Activision Blizzard (NASDAQ: ATVI) - Risk Arbitrage
The spread between the buyout price ($95/share) and ATVI’s current trading price is now ~21%.
StarTek, Inc. (NYSE: SRT) - Risk Arbitrage/Going Private Transaction
The spread between the buyout price ($5.40/share) and SRT’s current trading price is now ~35%.
Zynga Inc. (NASDAQ: ZNGA) - Risk Arbitrage
The spread between the buyout price ($9.86/share) and ZNGA’s current trading price is now ~11%.
*See links for the situation summary from prior editions
[Song of the Week]
See you next week!
- Dark Side of the Street