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“No single piece of macroeconomic advice given by the experts to their government has ever had the results predicted.”
- Peter Drucker
Thought of the Week
What is one topic that is on everyone’s mind in the investment community? Well, it’s been the same topic for almost 2 years. Inflation and interest rates. For me, it’s such an interesting topic to watch because there doesn’t seem to be a consensus on what will happen next.
The Fed was saying that inflation was just ‘transitory.’ But now agrees that the main problems weren’t just supply chain related. Today, it’s anyone’s guess how long inflation will persist and at what rate. My understanding is that inflation generally isn’t terrible for the economy below 5%. The US is currently at 6.5% inflation which is down from about 9% in June 2022.
For standard stock research, all of this matters to help project cash flows for companies and which businesses will perform well in a challenging macro environment. For now, I will continue to watch and read the experts’ guesses of where macro is headed next.
New Special Situation
Albertsons (NYSE: ACI) - Merger Arbitrage
Albertsons (NYSE: ACI) has agreed to be purchased by Kroger (NYSE: KR) for $34.10/share minus a $6.85/share special dividend or $27.25/share. The stock is currently trading near $21/share, which is a spread of about 30%. The spread is large due to a fear that the deal won’t pass an antitrust review. The deal is expected to close by the end of 2023 if it passes the antitrust review.
News Articles on the Situation:
“Albertsons-Kroger Deal Spooks Merger Pros” - By Jinjoo Lee of WSJ
Recent Insider Buying
Large Micro Cap Purchases
Top News of the Week
“Should Disney Spin Off ESPN and ABC? It’s Harder Than It Looks.” - By Ben Levisohn of Barron’s
“Fed Sets Course for Milder Interest-Rate Rise in February” - By Nick Timiraos of WSJ
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 ~29%.
No news updates.
AMMO, Inc. (NASDAQ: POWW) - Spinoff
News Updates: “Skylands Capital LLC Purchases 77,993 Shares of AMMO, Inc. (NASDAQ:POWW)” - MarketBeat
111, Inc. (NASDAQ: YI) - Going Private Transaction
The non-binding offer has been upgraded from $3.61 to $3.66/share (see link for SEC filing)
The spread between the offer price and the current stock price is 18%
No new updates.
World Wrestling Entertainment, Inc (NYSE: WWE) - Potential Sale
Current stock price: $89.69/share.
News Articles:
No News updates
*See links for the situation summary from prior editions
I watched Glass Onion this week and have had this song stuck in my head ever since. Here’s the song of the week!
See you next week!
- Dark Side of the Street
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