Dark Side of the Street (Edition #73)
$K Spinoff to Watch, $ACI News Update, Top Movers, Micro Insider Buying and More!
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New Spinoff to Watch
Kellogg (NYSE: K)
Kellogg is separating their business into two entities, WK Kellogg Co. (cereal business) and Kellanova (snack business). The company is hoping to complete the spinoff by the end of 2023. The distribution ratio is currently unknown.
My Quick Notes:
The cereal business is the smaller of the two entities by a large margin as it only generates $2.7B in revenue compared to Kellanova’s $13.1B. The company states that they are spinning off WK Kellogg as it believes that they will be able to generate more supply chain/manufacturing efficiencies as separate businesses. K could also believe that it’s company is under valued due to the cereal business ‘dragging down’ the overall business as WK Kellogg lost 25M last fiscal year. This is an interesting spinoff due to the large size gap in the companies (this creates potential for indiscriminent selling by institutional investors). WK Kellogg also has the potential to be undervalued due to the boring nature of the business and it being in a mature industry.
Here are other documents to help in your own research.
Recent Insider Buying
Large Micro Cap Purchases
Top News of the Week
“Want to Make $1,000 in 2 Weeks? Buy 99 Shares of J&J Stock.” - By Andrew Bary of Barron’s
“What Wall Street’s Top Recession Gauge Is Saying Now”. - By Sam Goldfarb and Peter Santilli of WSJ
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 ~4%.
News Articles:
No new updates
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 20%
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:
*See links for the situation summary from prior editions
See you next week!
- Dark Side of the Street