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SUPERVALU Inc. Message Board

  • med_investor med_investor Jan 17, 2013 2:10 PM Flag

    SSW tender example

    SSW tendered 20% of its outstanding shares on 12/23/11. Expiration date was 1/11/2012.
    SSW was trading at $10.45 and tender offered $15. This was a huge win. The day after tender, the price jumped to $12. The price kept claiming as tender days passed and eventually, it was traded above $14 a few days before expiration date. About 38% of outstanding shares were tendered by investors and the company matched 54% of each investor shares at $15. One day after tender expiration, the price dropped to around mid $13 but later it went up passing $15 and $16 per shares in a few weeks.

    Well, SSW removed only 20% of outstanding shares and that squeezed shorts and demand for shares become much higher than disposition.

    IN SVU case, 30% of float will be out of reach of investors for at least 2 years. This action first squeeze shorts and then demand for shares will go much higher in following weeks and price will be over $4 after the tender expiration date.

    Sentiment: Strong Buy

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