Mid-Month Update

September 2022 Mid-Month Update: A Buyback Special

September 2022 Mid-Month Update: A Buyback Special

We discussed the macro economic environment in our Buyback Wednesdays post this Wednesday and the idea I want to discuss for this mid-month update will likely be impacted by the macro environment despite the very attractive valuation of the company and a huge stock buyback the company announced. Build-A-Bear Workshop (BBW) $14.07 Build-A-Bear Workshop (BBW) announced a $50 million buyback when it reported fiscal Q2 2022 results on September 1. While ...

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August 2022 Mid-Month Update: Bear Market Rally?

August 2022 Mid-Month Update: Bear Market Rally?

The last two months have been a relief for most investors with exposure on the long side with a significant rally off the June 16th lows. The Nasdaq managed to notch gains of over 23% and the S&P 500 was not too far behind with gains of 17%. Merger arbitrage spreads that had widened significantly shrunk and 18 active deals closed in just the last four weeks. Beaten down tech ...

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July 2022 Mid-Month Update: Tipping Into A Recession

July 2022 Mid-Month Update: Tipping Into A Recession

When we started the month of July, there was speculation about the Fed raising interest rates anywhere from 50 basis points to 75 basis points during its July meeting. With the June 2022 inflation number coming in at a shockingly high 9.1%, that narrative has now shifted to a Fed rate hike of anywhere from 75 basis points to a full percentage. A 1% rate hike was unthinkable just a ...

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June 2022 Mid-Month Update: Bear Market Playbook

June 2022 Mid-Month Update: Bear Market Playbook

After an intra-day dip into bear market territory in May, the S&P 500 finally entered a bear market earlier this month. We saw some moderation of fear today but as you can see from the Fear and Greed Index below, we are still in extreme fear territory. As I write this, the S&P 500 is down 8.8% for the month, while our model portfolio has given back 3.5% of its ...

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May 2022 Mid-Month Update: Merger Arbitrage + Spin-Off Combo Deal

May 2022 Mid-Month Update: Merger Arbitrage + Spin-Off Combo Deal

Current market conditions have impacted several previously uncorrelated assets that dropped in unison over the last couple of weeks and we have also seen merger arbitrage spreads widen. There have been times when arbitrage spreads have been very tight and I looked for opportunities in one of the other four strategies we track on Inside Arbitrage but this is not one of those times. The widening of spreads have created ...

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April 2022 Mid-Month Update: A Sum-of-the-Parts Opportunity

April 2022 Mid-Month Update: A Sum-of-the-Parts Opportunity

Considering most of the Inside Arbitrage Model Portfolio companies are yet to report quarterly results, we decided to focus on a new opportunity with recent insider buying for this update. You don’t hear a lot about sum-of-the-parts (SOTP) opportunities these days because it is both difficult to come across companies that are selling at a discount to their component parts and more importantly there may not be a clear catalyst ...

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March 2022 Mid-Month Update: A Trio Of Merger Arbitrage Opportunities

March 2022 Mid-Month Update: A Trio Of Merger Arbitrage Opportunities

It is amazing how quickly things can unravel and conditions have gotten worse on multiple fronts during the last two weeks. In addition to the war in Ukraine, persistent high inflation and the specter of rising interest rates, we now have China locking down their tech and manufacturing hub, Shenzhen. The city of 17.5 million people is experiencing a lockdown just as most other countries have decided COVID-19 is endemic ...

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February 2022 Mid-Month Update: Thinking in Themes

February 2022 Mid-Month Update: Thinking in Themes

The big Consumer Price Index (CPI) number reported last week appears to have put to rest the idea that the increase in inflation we were seeing was transitory. A 7.5% increase in the CPI compared to the same period last year was higher than most market participants were expecting and contributed to further volatility in the markets. Volatility was one of the themes we were expecting for 2022 and we ...

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January 2022 Mid-Month Update: SPAC Attack

January 2022 Mid-Month Update: SPAC Attack

The sector and style rotation we started seeing towards the end of 2021 picked up steam in the first two weeks of January. In our 2022 outlook article for Seeking Alpha we wrote the following on Dec 31, 2021, “We are coming off two amazing stimulus fueled years where the S&P 500 and Nasdaq generated gains of 46% and 74%, respectively (at the time of writing) since the start of 2020. ...

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December 2021 Mid-Month Update: Doubling Down on Magnachip

December 2021 Mid-Month Update: Doubling Down on Magnachip

This is the third post in a new series that we publish mid-month for InsideArbitrage Premium and InsideArbitrage Plus subscribers. These posts will contain updates related to the model portfolio (if any) or a new quick idea. This month we are going to focus on a busted deal that looks attractive despite the deal failure. In our last mid-month article titled A Time For Caution, we highlighted the need to start scaling ...

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