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Elementary, my dear Watson!
I am long $ACIA & wrote covered calls (Nov 70 C) to take advantage of heightened IV last week. My intention is to give up the long stock if called upon.
#mergerarb #alpha
Here are my reasons in this thread:
https://twitter.com/JulianKlymochko/status/1344375558344384513
I am long $ACIA & wrote covered calls (Nov 70 C) to take advantage of heightened IV last week. My intention is to give up the long stock if called upon.
#mergerarb #alpha
Here are my reasons in this thread:
https://twitter.com/JulianKlymochko/status/1344375558344384513
1/ Standard Tax Loss Harvesting by $ACIA shorts!
Short covering of ~2M shares from last week of Oct 2020.
Evidence of #shortinterest:
SI on 10/28: 5.1M shares
SI on 12/15: 3.3M shares
#shortinterest went down further into NYE 12/31
#merger #mergerarb
Src: @Sentieo
Short covering of ~2M shares from last week of Oct 2020.
Evidence of #shortinterest:
SI on 10/28: 5.1M shares
SI on 12/15: 3.3M shares
#shortinterest went down further into NYE 12/31
#merger #mergerarb
Src: @Sentieo
2/ I mentioned this phenomenon of $ACIA short covering in $ACIA for tax loss in my tweet on Dec 9, 2020 here
#mergerarb #alpha #alphageneration #activeinvesting #specialsituation #merger https://twitter.com/trendwhizo/status/1336547660531163136
#mergerarb #alpha #alphageneration #activeinvesting #specialsituation #merger https://twitter.com/trendwhizo/status/1336547660531163136
3/ Interactive chart of Short Interest vs Stock Price here
http://snt.io/deFmGzmhS
Source: @sentieo
#mergerarb #merger
#alphageneration #alpha
#activeinvesting
#specialsituation
http://snt.io/deFmGzmhS
Source: @sentieo
#mergerarb #merger
#alphageneration #alpha
#activeinvesting
#specialsituation
4/
Due to #merger overhang, $ACIA has underperformed the peers used for comps in $ACIA $CSCO deal.
The peers line (light blue) include
$CIEN $IIVI $IPGP $IPHI $AAOI $LITE $MRVL $SMTC & ADV:GR
Equal weighted total returns of peers: 35%
Src: @sentieo
Due to #merger overhang, $ACIA has underperformed the peers used for comps in $ACIA $CSCO deal.
The peers line (light blue) include
$CIEN $IIVI $IPGP $IPHI $AAOI $LITE $MRVL $SMTC & ADV:GR
Equal weighted total returns of peers: 35%
Src: @sentieo
5/
Peers used for $CSCO - $ACIA #merger valuation outperformed $ACIA by over 3x in stock price returns.
For Q4'20, stock price returns:
$ACIA : 8.83%
Peers : 34.62% (Equi-weighted)
Interactive @sentieo chart
http://snt.io/VgFmGzzVf
#mergerarb #alpha #specialsituation
Peers used for $CSCO - $ACIA #merger valuation outperformed $ACIA by over 3x in stock price returns.
For Q4'20, stock price returns:
$ACIA : 8.83%
Peers : 34.62% (Equi-weighted)
Interactive @sentieo chart
http://snt.io/VgFmGzzVf
#mergerarb #alpha #specialsituation
The #shorts unwound by going long position $ACIA Nov (& then Feb) 70 call #options (@ low IV) for just $1.60 (Oct) & then covered the short position!
Call premium (green) offset the loss to shorts with stock's rise (orange)!
#investing #merger #arbitrage
Call premium (green) offset the loss to shorts with stock's rise (orange)!
#investing #merger #arbitrage
