Dark Side of the Street (Edition #67)
New Stock Research?, $LL Completed Situation, $ATVI News Update, 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.
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“Those who cannot remember the past are condemned to repeat it.”
-George Santayana
Thought of the Week
I’ve decided to embark on a new stock journey…. I’m going to research over 150+ turnaround stocks over the past 20 years. I’ve always been interested in turnaround stocks (partially because many of these stocks fall into micro-cap land), but there can be a lot of risk involved with these companies, and it can be tricky to know when/if a company will be successful.
So I’ve decided to study turnarounds to really understand when a company can make it back from the dead and when they are just dead. My belief is that life is generally not random, and people create their own luck. Anything that appears completely random is likely misunderstood.
My hope is that I’ll be able to share at least one of these stocks each week in a new series called Turnaround Stock History. I hope that you’re as excited to learn about these stocks as I am!
Completed Situations on Watchlist
LL Flooring Holdings (NYSE: LL) - Sale Offer
On June 26th, the LL Board rejected the sale offer at $5.76/share. In the press release, LL noted that they would be open to a sale if the offer price rose significantly but does not believe that the current price reflected the true value of the business.
The stock has dipped under $4/share after this announcement. This is a stock that may be interesting to look at as a turnaround stock. In 2021, the stock traded near $30/share but has come under significant pressure as earnings have declined dramatically in the last year. Here is the full press release below.
“LL Flooring Board of Directors Unanimously Rejects Unsolicited Proposal from Cabinets To Go, Subsidiary of F9 Brands, Inc.” - Business Wire
Recent Insider Buying
Large Micro Cap Purchases
Top News of the Week
“Investors Spurn Dividend-Paying Stocks as AI Booms” - By Hardika Singh
“There’s a New Way to Watch TV. It’s Already More Popular Than HBO.” - By Eric Savitz of Barron’s
Top Micro Cap Movers this Week
Top 10 Gainers
Top 10 Losers
Special Situation Watchlist
Activision Blizzard (ATVI 0.00%↑) - Risk Arbitrage
The spread between the buyout price ($95/share) and ATVI’s current trading price is now ~13%.
News Articles:
“Activision’s Microsoft Saga Is Almost Over. It May Be Time to Sell the Stock.” - By Connor Smith of Barron’s
111, Inc. (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 48%
Albertsons Companies, Inc (ACI 0.00%↑) - Merger Arbitrage
The spread between the buyout price ($27.25/share) and the current trading price is now ~25%.
News Articles:
No new updates
*See links for the situation summary from prior editions
Happy 4th of July!
See you next week!
- Dark Side of the Street