pantheman Posted December 16, 2015 Share Posted December 16, 2015 Short term arbitrage opportunity. Basically the company is going private and squeezing out smaller holders tonight via a reverse split followed by a forward split. Anyone holding fewer than 250 shares will be cashed out at $52.50, stock currently trading ~$51. Nasdaq confirmation http://www.nasdaqtrader.com/TraderNews.aspx?id=ETA2015-197 8-k from vote yesterday http://biz.yahoo.com/e/151215/kcli8-k.html Link to comment Share on other sites More sharing options...
oddballstocks Posted December 16, 2015 Share Posted December 16, 2015 Little late to the game are we? This was a great opportunity when it was in the $40s a month or two back. At $51 I'd say the juice is mostly gone. You could make a few bucks in a day, but the opportunity was earlier. Even this morning it was trading at $49. I'm amazed this closed, I only purchased in one account. Link to comment Share on other sites More sharing options...
bizaro86 Posted December 16, 2015 Share Posted December 16, 2015 I bought this when the deal was announced with a cost basis of around 47, and sold when articles on Seeking Alpha and elsewhere pushed it up to $50, as I thought there was a real chance a flood of new odd lot holders would kill the deal. Congrats to those who held. Link to comment Share on other sites More sharing options...
Hielko Posted December 16, 2015 Share Posted December 16, 2015 It might still be killed? Wonder how many people bought odd lots today. Link to comment Share on other sites More sharing options...
krazeenyc Posted December 16, 2015 Share Posted December 16, 2015 I'm going to regret this... but... why are we talking about this? Link to comment Share on other sites More sharing options...
pantheman Posted December 16, 2015 Author Share Posted December 16, 2015 I'm going to regret this... but... why are we talking about this? 2% return on a 12 hour holding, figured people would want to scoop up the free money. I've never seen a deal fall apart (there is always that black swan lurking, I will admit) once an exchange has published the information, usually the info sheet posts after the stock is already halted. Link to comment Share on other sites More sharing options...
johnny Posted December 16, 2015 Share Posted December 16, 2015 Despite losing 20% of the overall portfolio in the second half of 2015, the annualized return realized on our Kansis City Life position demonstrates the soundness of our investment philosophy of cruising internet forums for ideas. How does that look, guys? Link to comment Share on other sites More sharing options...
writser Posted December 16, 2015 Share Posted December 16, 2015 I'm going to regret this... but... why are we talking about this? 2% return on a 12 hour holding, figured people would want to scoop up the free money. I've never seen a deal fall apart (there is always that black swan lurking, I will admit) once an exchange has published the information, usually the info sheet posts after the stock is already halted. He was being sarcastic. I think you don't understand the dynamics of deals such as this one. Do you understand why it is potentially not in your best interest to share this idea? If not, take a look at for example HKFI. Just keep it for yourself - the cancellation risk is real. Though in this case it looks like mgmt is not really interested in cost savings. According to the proxy they expect to pay $30m to save $800k annually. Doesn't really make sense - unless insiders want to take the company private at a bargain price. Which is why I think this deal will probably go through anyway. A company of this size should be able to cough up another $10m unless they're really pissed. Link to comment Share on other sites More sharing options...
aws Posted December 17, 2015 Share Posted December 17, 2015 Why is this still trading today? What is one buying or selling at this point? Link to comment Share on other sites More sharing options...
EricSchleien Posted December 17, 2015 Share Posted December 17, 2015 Why is this still trading today? What is one buying or selling at this point? Hey! It's still a public company (just has less than 300 shareholders now) Anyone owning under 250 shares was bought out. Link to comment Share on other sites More sharing options...
wachtwoord Posted December 17, 2015 Share Posted December 17, 2015 Why is this still trading today? What is one buying or selling at this point? Hey! It's still a public company (just has less than 300 shareholders now) Anyone owning under 250 shares was bought out. So if too many people buy now they still cant go private? Link to comment Share on other sites More sharing options...
oddballstocks Posted December 17, 2015 Share Posted December 17, 2015 Why is this still trading today? What is one buying or selling at this point? Hey! It's still a public company (just has less than 300 shareholders now) Anyone owning under 250 shares was bought out. So if too many people buy now they still cant go private? Not quite. They'd need 500 or 1000 registered (in certificate form) shareholders to be forced public again. Thresholds are different for going private and being forced public. Link to comment Share on other sites More sharing options...
aws Posted December 17, 2015 Share Posted December 17, 2015 Why is this still trading today? What is one buying or selling at this point? Hey! It's still a public company (just has less than 300 shareholders now) Anyone owning under 250 shares was bought out. So if too many people buy now they still cant go private? I'm probably wrong, but I thought the point of the reverse split is they had to stay under 300 shareholders to go private. In that case the doing the split 1 minute after the reverse split makes no sense to me. Maybe they only needed to be under 300 for an instant to be able to terminate their registration and subsequent dilution wouldn't matter, but if that's the case I wouldn't think it could still be traded on the Nasdaq. Link to comment Share on other sites More sharing options...
benbuffett Posted December 17, 2015 Share Posted December 17, 2015 Looks like arb opp is still in play? 12% upside at $47 Link to comment Share on other sites More sharing options...
bizaro86 Posted December 17, 2015 Share Posted December 17, 2015 Nope, if you buy now you won't get cashed out. That's the reason the price collapsed. Link to comment Share on other sites More sharing options...
scorpioncapital Posted December 18, 2015 Share Posted December 18, 2015 So how do they go private? Link to comment Share on other sites More sharing options...
bizaro86 Posted December 18, 2015 Share Posted December 18, 2015 They cashed out all the small shareholders already. You can still buy shares, they just won't be filing with the SEC anymore. Link to comment Share on other sites More sharing options...
aws Posted December 18, 2015 Share Posted December 18, 2015 So how do they go private? Per the latest 8K they will file a form 15 to delist effective 1/7/16. This is starting to get interesting. The stock just hit a new 52 week low of under $41. It looks like the people who bought less than three days before the reverse split are getting burned as their stock had to be settled to get the payout. They must be the ones bailing out now and pushing the price way down. I bought up a position the same size as the ones I effectively tendered in the reverse split. I expect that it would drift up close to the price before the announcement before the delisting is effective. Link to comment Share on other sites More sharing options...
scorpioncapital Posted December 18, 2015 Share Posted December 18, 2015 So they delist and public shareholders become private shareholders, or they still trade OTC? I'm just wondering how private shareholders ever sell their shares in the future, although they will receive dividends along the way. Link to comment Share on other sites More sharing options...
aws Posted December 18, 2015 Share Posted December 18, 2015 See FAQ in the proxy statement: http://www.sec.gov/Archives/edgar/data/54473/000101410815000279/kcli-def14a_nov132015.htm "Our Stock no longer will be quoted in the NASDAQ Capital Market. The Board of Directors anticipates that trades in our Stock may be made through the Over the Counter QX market, but there may be less liquidity for our Stock than presently is available in the NASDAQ Capital Market." Link to comment Share on other sites More sharing options...
randomep Posted December 18, 2015 Share Posted December 18, 2015 See FAQ in the proxy statement: http://www.sec.gov/Archives/edgar/data/54473/000101410815000279/kcli-def14a_nov132015.htm "Our Stock no longer will be quoted in the NASDAQ Capital Market. The Board of Directors anticipates that trades in our Stock may be made through the Over the Counter QX market, but there may be less liquidity for our Stock than presently is available in the NASDAQ Capital Market." It is trading today at $40, I am seriously thinking about it.... or maybe I should wait for it to tank to $35, I used to own it last year so I know the company and wouldn't mind holding it at all. Link to comment Share on other sites More sharing options...
aws Posted December 18, 2015 Share Posted December 18, 2015 I wouldn't expect it would go too much lower. I think what happened is all the people who rushed in and bought after the deal was approved didn't realize their shares had to be settled in order to be bought out. Now they are all selling out. The people who really made bank would be odd lot holders who sold on the 16th. They could have sold their settled shares for 51, and because they were still shareholders of record they would have gotten the 52.50 payout from the company as well, making them effectively short the stock, which they can now buy back $11 cheaper. Link to comment Share on other sites More sharing options...
EricSchleien Posted December 19, 2015 Share Posted December 19, 2015 Does anyone know how to search for these kinds of transactions? Link to comment Share on other sites More sharing options...
LC Posted December 19, 2015 Share Posted December 19, 2015 and thus ends the age of the odd lot tender... Link to comment Share on other sites More sharing options...
scorpioncapital Posted December 20, 2015 Share Posted December 20, 2015 Does anyone know how to search for these kinds of transactions? I actually just typed in forward/reverse stock split in google news and it seems to spit out some stuff as the case may be. I also saw this site - http://www.specialsituationinvestments.com/ Seems the problem is they are published on proxy statements and not Schedule TO or Schedule DEF14M, so maybe there is a tool to search for words across DEF14 schedules for 'reverse split'. Link to comment Share on other sites More sharing options...
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