I think your process and way of thinking about this arb play was correct, even if the IRR underperformed the index.
Liquidations and legal plays generally take longer to play out than expected. At least in my experience. I am living this now with MEEC.
I’ve set up a Google alert for “CVR” and “contingent valence right.” On a risk/reward basis the best arbitrage plays going. By acting quickly you can usually lock in a spread on the takeover, so you get paid to take the CVR. They don’t always pay out but when they do it’s a beautiful and lucrative thing.
CVRs are popular in US pharma deals given the number of transactions predicated on FDA approval and timelines. But occasionally they show up in Canadian mining - like the Great Bear takeover by Kinross.
Congrats Dean, 30% irr is nothing to sneeze at. Though it could've been a lot higher had the insiders not tried to screw minority shareholders.
I made this my largest position and now looking back I think the decision was correct even though the return is not as high as I had expected. I sold all my hwo shares which I had always assigned zero value. Thought about rolling into more hoh but decided against it and will just keep my current hoh shares. I do think hwo is overvalued and hoh is undervalued but with lots of uncertainties.
Anyway good work as always. I benefited tremendously from your blog, from this idea and also in general. Thank you
I think your process and way of thinking about this arb play was correct, even if the IRR underperformed the index.
Liquidations and legal plays generally take longer to play out than expected. At least in my experience. I am living this now with MEEC.
I’ve set up a Google alert for “CVR” and “contingent valence right.” On a risk/reward basis the best arbitrage plays going. By acting quickly you can usually lock in a spread on the takeover, so you get paid to take the CVR. They don’t always pay out but when they do it’s a beautiful and lucrative thing.
Thanks Sultan. I had a google alert for "proposed transaction" but it's pretty low value. I'm going to add CVR contingent value right.
CVRs are popular in US pharma deals given the number of transactions predicated on FDA approval and timelines. But occasionally they show up in Canadian mining - like the Great Bear takeover by Kinross.
“Contingent VALUE right”
What I get for banging this out on an iphone SE
Congrats Dean, 30% irr is nothing to sneeze at. Though it could've been a lot higher had the insiders not tried to screw minority shareholders.
I made this my largest position and now looking back I think the decision was correct even though the return is not as high as I had expected. I sold all my hwo shares which I had always assigned zero value. Thought about rolling into more hoh but decided against it and will just keep my current hoh shares. I do think hwo is overvalued and hoh is undervalued but with lots of uncertainties.
Anyway good work as always. I benefited tremendously from your blog, from this idea and also in general. Thank you