Update May 23: Cash Received, JLN transaction officially closed.
I just wanted to give everyone a quick update on the Jaclyn transaction. My shares were taken from me this morning, and "submitted for cashout" to JLN. According to my broker, they are merely waiting on a cash out date, which should be sometime in the next few weeks.
I bought in at $7.82 / share, and I should receive 10.21/share in due course. That's a gain of 31%, in about 50 days of holding (assuming I get the cash in two weeks). That comes out to a whopping annualized gain of 226%.
I wish these came along more often, but alas they do not. Most of the time, these arbitrage spreads will be much narrower, and their prospects much more uncertain. Jaclyn was a rare case of a very big spread, a short holding period, and a high probability of success. It could only be taken advantage of by very, very, small holders of stock as well.
Quoting Yogi:
"When you come a fork in the road, take it."
Monday, May 12, 2008
Jaclyn, Inc.: Success
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3 comments:
Are you concerned that in the Form 25 or in the recent 8K and 10Q, management does not provide any details as to what price it will take the stock out at?
The 10.21 price is not concrete. I understand that management has an incentive to delist (since it will save them 500K annually), but what stops them from offering just about market prices? Is the 249ers only proctection there ability to say no to a low offer and prevent the delisting?
Nick
Nick
They named the $10.21 price in the proxy, and that is the price the shareholders voted "yes" on at the meeting. It's too late for them to change the price now. The price actually is concrete, because the 79% of shareholders than voted "yes" were voting on being taken out at that price.
If they decided to change something, they'd have to file an amended proxy with a new price, and do the process all over again. Technically that could happen, but its very, very, unlikely.
The shares have been taken from brokerage accounts already, and are being cashed out at $10.21. Per my broker:
"We found out that share holders with less than 250 shares will be receiving $10.21 per share. We do not have a specific pay date yet for that cash, but it will definitely be after 5/16/08."
Hope that helps,
Jeff
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