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Investors Title Co. Message Board

  • astral_tsar astral_tsar Oct 20, 2008 4:20 PM Flag

    CEG Part Deux


    Thanks for the dividend info! Unfortunately I dithered and am not in for Round 4. I see depressing signs of intelligence* in the price today. Maybe I've seen my last round.


    *Well, either common sense has latched onto this arbitrage like a malevolent lamprey, or else CEG is just up with the market.

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    • astral:

      Partly because CEG was so profitable for me, I also have the urge to try to make another quick trade. Like you, I have been fighting that urge successfully so far. Temptation!

    • Maybe it's people who had the idea that the Mid American offer was a floor on the price, a free put?

      CEG seems to be settling on 23 for now, who knows why except that it spent a lot of time there when that number made sense. I can't see that what's left of the company is necessarily worth 23, even with the cash infusion. Maybe it is and maybe it isn't.

      (I have a powerful emotional feeling that it's going to go up, and that I should buy a lot at 23 for a quick trade. I'm working hard to ignore that feeling.)

    • Yeah, I don't get that. Why pass up a sure 29 in favor of a pretty-likely 27.40 or so? And but if you weren't hoping for the Buffett deal, then why sell? Stopped out maybe? I dunno.

      Another thing just woke me up, though. I haven't really looked at the EdF deal, but if it does go through, won't Constellation have something like $25 per share in cash? And then whatever bag of crap is left over, is the value of that stuff negative or positive? I'm gonna get up early and see if I can figure that out.

    • astral:

      CEG closed at $23 and traded as low as $22.62.

      Do you suppose there was a stampede of investors who bought with the intention of holding until the Buffett offer closed?

    • pmlljl,

      Yeah I have no idea what the shares might be worth now.

      Other deals would be great. I've sat and watched the PDS/GW deal, staring at GW from the mid $4s until the premium basically vanished, but I didn't do anything. I don't really know how to judge the risk of the deal not closing.

    • astral:

      CEG has traded today in a range of $24 to $30 and is currently $25 and change. Buffett has agreed to cancel his deal to buy the company but he will get a lot of money out of the transaction. CEG is now going to do a deal with EDF. It looks as if the market can't decide how to value CEG. I am glad to have sold and will watch from the sidelines.

      Have you found any other merger arbitrage deals that we can play in? I miss the action and the profits.

    • pj:

      I would think that it would be of sufficient worth for Golden Ocean to take the tax hit and do one enormously good thing for the world economy. Besides, the corpses of the overpaid executives would add to the food supply for marine life and lead to good hunting for polar bears. Now all we need is for this dream to turn into reality.

    • pmlljl,
      The difficulty would be that Golden Ocean would not be able to claim to American National that Golden Ocean had suffered any damages when its ship sank since its huge hold had been full of overpaid executives instead of iron ore, the benefit of whose sinking would more than offset the loss of any ship. In fact, the IRS might argue that the event generated taxable income for Golden Ocean.

    • pmlljl,
      Here are some of my orders and limits:
      ANAT 55.00
      BBGI 1.10
      EBF 6.00
      ORI 6.00
      TUES 1.30, 1.20
      Too low?

    • pj:

      If it was up to me, I would fill the holds of all the ships with overpaid executives and then sink the ships.

      I have had the time machine on monitor and programed it to alert me when we reached 1974.
      I received a weak signal and when I checked, it alerted me to the fact that only selected stocks have reached 1974 levels. For example, this morning I got a partial fill on FLXS at $7.50. Book value is more than $16 and the yield was about 7%. It is the lowest I have ever seen it. SCX got down below $11, but I did not get an execution at my limit of $10. We got close on ANAT, but not to my limit of $60. Please ask the bear to put some fright into the trick or treaters tonight so that they sell and fill my orders on Monday.

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