In this merger arb investment, you’re paying $1 for what I believe is $1.50 of potential value in a deal that could close within weeks. The contingent, annualized IRR toward completion — largely uncorrelated with the market — could be off the charts.
It’s also a levered turnaround case post-merger, so should things work out for the surviving entity, this could multiply your $1 a couple of times over during the next few years.
The downside in the case of an unlikely deal break is sort of covered since the stock is a net-net trading at 73% of net current assets, and the board would be working toward other ways to unlock the underlying value, including a potential liquidation.
This stock is for tiny accounts only. $10-30k of volume changes hands per day. It’s overlooked. That’s why you get the opportunity.
Let’s dig in.