would not surprise me to see JAKK scrap the $20 tender and just sell to Oaktree at $22
I think it was a ploy to get Oaktree to increase their initial $20 bid
I think Clinton group would be on board with an outright sale to Oaktree in the $20-22 range
lots of chatter today and stock looks like it is being manipulated down (even with the $20 tender, it is hard to argue why the stock would trade down to the low 17's)
I have bought about 4,000 shares today with an average of about 17.55
<<Well, I do know there is always risk, but sometimes the thought process escapes me. It COULD go lower, but it only does if people are selling at a lower price. Even if you bought at19, why sell at 17? Take the chance on the tender offer at least.>>
Sell at 17 because it could go lower and look, it did go lower:$15.90. It baffles me that some people do not even give a 1% chance that a stock they own could go lower.
Well, I do know there is always risk, but sometimes the thought process escapes me. It COULD go lower, but it only does if people are selling at a lower price. Even if you bought at19, why sell at 17? Take the chance on the tender offer at least.
<<but it still doesn't make sense to me to sell at 17.38 unless you bought at alot lower. What am I missing?>>
1) Well, you are half way there. What if you bought a lot higher? Like $19+ within a month? Pay $19+, no brainer, no risk, $1 upside, again no risk and here we are at ~$17.50, down more than $1.50. $20 tender for 4/25 million shares does not mean $20 market price for stock.
2) Buy on rumor sell on news?
3) No bid from Oaktree Capital. Like I said lots of new owners at higher prices and no rescue in sight. Long weekend coming up. Europe could have yet another problem...
4) Retail investors long $20 call options because it has to go over the bid. Whops!
This is called risk arbitrage because, guess what, there is risk.
what is the point?
Of course they are commencing the tender, but that doesn't mean anything, they have a month before the tender offer closes.
You can sell to them at 20 in June so selling at 17 makes no sense. That is a 15% return in a month.
But I happen to think a more likely scenario is that the company never buys shares and between now and tender they agree to a deal with Oaktree.
Either way the stock is a buy and you will either get $20 or $22-23 depending on what happens.