Dark Side of the Street (Edition #64)
Behavioral Finance Thoughts, Top Movers, Special Sit Updates and More!
Welcome to the Dark Side of the Street! Here we shed light on the dark corners of the market. If you haven’t already, sign up below for weekly updates. If you’re new to special situations, see some of my learning resources on my substack home page to learn more! Feel free to reach out with any feedback.
Disclaimer: Nothing on this newsletter or on this blog is investing or financial advice; please see our full disclaimer here.
“Investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
–Jason Zweig
Thought of the Week
I’m starting to feel bullish about stocks, and contrary to normal behavior, the market agrees, as the S&P is up about 2% last week. The main reason is inflation declining. Although there are likely to be lasting effects from the last year of higher inflation, near 5% inflation is good for the economy.
As I invest more and learn about my own behavior and thoughts about investing, one conclusion that I draw is that my thoughts/feelings are generally a bit early. I actually think this is something that I may start to track in a more scientific way. How correct is my intuition on markets/stocks? And if so, how long does it take for my intuition to kick in the real world?
Why would I do this? Well, we all have biases and tend only to remember the times we were correct vs the times, we got it wrong. The timing measure would be nice to quantify how much faster my brain can move than it takes for the events to actually unfold in real life. This may help with timing buys and building confidence so that I don’t sell too early.
Recent Insider Buying
Large Micro Cap Purchases
Top News of the Week
“Alibaba to Spin Off Cloud Intelligence Unit” - Dean Seal of MarketWatch
“Sony considers financial services spinoff and listing, shares surge” - By Ambar Warrick of Investing.com
Top Micro Cap Movers this Week
Top 10 Gainers
Top 10 Losers
Special Situation Watchlist
Activision Blizzard (ATVI 0.92%↑) - Risk Arbitrage
The spread between the buyout price ($95/share) and ATVI’s current trading price is now ~20%.
News Articles:
111, Inc. (YI 0.00) - 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 32%
Albertsons Companies, Inc (ACI 0.40%↑) - Merger Arbitrage
The spread between the buyout price ($27.25/share) and the current trading price is now ~34%.
News Articles:
No new updates
TravelCenters of America (TA 0.01%↑) - Risk Arbitrage
The spread between the buyout price ($86/share) and the current trading price is now 0%.
News Articles:
Valvoline Inc. (VVV 0.00%↑) - Odd Lot Tender Offer
The offer range is between $35 - $40/share. The stock closed at $38.73/share, representing a max gain of ~3%.
The offer expires on June 8th, 2023
Cumulus Media Inc. (CMLS 0.00%↑) - Odd Lot Tender Offer
The offer range is between $2.85- $3.25/share. The stock closed at $3.24/share, representing a max gain of ~3%.
The offer expires on June 8th, 2023
*See links for the situation summary from prior editions
More focus music for your investment research!
See you next week!
- Dark Side of the Street