Two items of good news or at least good rumors for ODP with Mexio and OMX merger. Correct me if I am wrong, but last time merger rumours were abound, the stuck went up to a 52 week high at that time of $6.25.. What do you gents think we will see in the AM and if the merger/Mexico deals goes through?
I am going to predict we break $5.00 today and if the merger goes through, with OMX being in the 10's now, ODP goes to between $8.50 - $9.50..
I think hoping for 8.50-9.00 a share is wishful thinking, and I remember your story. You should seriously consider selling around 6.00-7.00 a share, because in all likely hood it will not hold beyond that valuation. This company has no competetive advantage, and in the long run will never earn more then a few percent above their cost of capital, meaning the value in this company is largely going to be unlocked by asset sales and cost cutting, not by growing. It was a good value play in 3.00-3.50 range because it was being valued at a large discount from the asset valuation. Which is around 5.50-6.00 a share in my calculations. I had a GTC order in to sell all my shares at 6.00 and got taken out today with the news. IMO holding on and hoping for such a high valuation is betting on the greater fool theroy, which is never a good strategy. If I were you I would use this opportunity to get out, and seek better bargains, and values elesewhere. It really makes no sense to hold on and hope to break even. I pull this advice from Seth Klarman's book Margin of Safety, it is a good read, and will lay out a decent sell stragety for you.
I predict that it will open at around $6.00. :)
HAHA. It's a little late for that prediction. I started to put in a sale order Saturday night for $6. I might wish I had.
If ODP goes anywhere near $9,5, OMX should be pushing $20. I think it would be possible. The combination of the two companies (if run right by good management) would be a formidable foe for Staples. And. regardless of what a lot of people say, I for one do not believe the brick and mortar office supply store is dead. I am not going to places like Walmart, Target, or Best Buy, to walk around in their cavernous stores to get what I need. I never have, and I never will.
This could be the chance we have been waiting for, or it could be another one of those stories that just got out of control. For the longs on the board: Good luck. I hope you all at least break even. It would rally be nice if we could actually see a profit for believing in the company for so frigging long. :)