Dark Side of the Street (Edition #66)
$LL Sale Offer, $CMLS Odd Lot Completion, Top Movers, 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.
New Situation to Watch
LL Flooring Holdings (NYSE: LL) - Sale Offer
The original founder of LL Flooring (formerly Lumber Liquidators) has offered to purchase the company for $5.76/share. The stock is currently trading at $4.71 so the offer represents a premium of 20%. The former founder, Tom Sullivan has amassed ~9.5% stake in the company with the sole intent of purchasing the whole company outright.
Also, another 5% owner of LL, Howard Jonas, sent a letter to the board encouraging the sale. Here is the Global Newswire of that letter.
LL Flooring is a company that consistently records revenues of ~$1B annually but has come under hard times due to rising costs. Now, LL’s market cap has sunk under $200M as they appear to be struggling with cash flow. This stock looks to be an interesting turnaround value stock even if the offer is turned down and we are therefore adding it to the watchlist.
Completed Situations
Cumulus Media Inc. (CMLS) - Odd Lot Tender Offer
CMLS completed its odd lot tender at a purchase price of $3.25/share. This was another odd lot situation where investors held the stock price near the upper end of the bid range until the offer expired making it difficult for arbitrators to make more than a couple percent on the deal.
Here is the Global Newswire of the final details of the offer.
Recent Insider Buying
Large Micro Cap Purchases
Top News of the Week
“Crypto Exchange Binance.US Avoids Broad Asset Freeze” - By Jenna Telesca of WSJ
“Farmers Worry $8.2 Billion Agriculture Deal Will Diminish Competition” - By Patrick Thomas of WSJ
Top Micro Cap Movers this Week
Top 10 Gainers
Top 10 Losers
Special Situation Watchlist
Activision Blizzard (ATVI 0.20%↑) - Risk Arbitrage
The spread between the buyout price ($95/share) and ATVI’s current trading price is now ~16%.
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 28%
Albertsons Companies, Inc (ACI 0.82%↑) - Merger Arbitrage
The spread between the buyout price ($27.25/share) and the current trading price is now ~28%.
News Articles:
No new updates
*See links for the situation summary from prior editions
Some focus music while you research LL Flooring.
See you next week!
- Dark Side of the Street