Back in January Shanda Games GAME announced a proposal of a going private transaction valued at $6.90 a share. The stock is currently at only $6.50 a share based off of Fridays close. This is about a 6% spread. I did some quick reading on this as I was unable to actually pull up the filing outlining it. The most official info I could pull up was that old press release. As far as I know this is still likely to get approved and become a done deal. I don't see how it wouldn't when "As of January 27, 2014, the Consortium members beneficially owned, in the aggregate, approximately 76.2% of the Company's outstanding shares" according to their press release. The only key thing I'm missing here is the limit on the number of shares one can hold.
As far as macro trades go there doesn't seem to be anything more certain than the fact that interest rates will eventually rise. The FED has said they will raise rates when they like the employment figures. Unemployment rates have been falling across the country and to my knowledge the most recent rate was between 6-7% nationwide. My state of North Carolina is now down to about 6.5%.
A few years back I was almost certain that the FED's unprecedented low interest rate environment was going to spawn serious dollar inflation. Something along the lines of the late 1970s through early 1980s inflation that only Paul Volker saved us from in the early 80s. One of the reasons I feel less concerned about massive inflation is the falling price of gold. To see the true value of the dollar you only have to look at gold. Rapidly rising gold means the dollar is falling and vice versa.
Now to the play. The only place rates can go from here are up. The timeframe is less certain but the fact they will go up is clear. When rates go up bonds go down. The simple trade is to short long-term Treasury Bonds. The Proshares Ultra short US Tresury bonds ticker TBT is a vehicle. I'm not going into this trade tomorrow or the next day or even next month. But some day this will be a good trade.
LoJack Corporation (LOJN)
As I am typing this we are in the middle of the tech bubble it seems. I probably wouldn't touch Facebook with a ten foot pole. I noticed this stock LoJack LOJN awhile back when they reported their 4th quarter. 4th quarter revenue had risen 20%. The thing I like more is that they gave guidance of next full years revenue growth to be 8% to 10% year over year. The business is simple. They help people recover stolen cars and do car security. It's a small company too with just under a $100 million market cap which is good. The market still isn't fully valuing this companies revenue and earnings growth. The stock is currently at 5.60. They should grow earnings atleast 25% a year but the current PE is just 16. Foward PE multiple is just 13!! This is if they just do $.43 EPS for the year.
I bought the oil ETF UCO awhile back. This position trade is working out well. It's up 11% now as oil has climbed. I also bought some Silver American Eagle coins as a long-term investment from Apmex.com recently. Gold and silver have both fallen a lot from the highs. It wouldn't even surprise me if they fell more. But, I don't really care as I'm just looking to build a long-term position. Both charts of course went parabolic and are selling off. Silver looked like it came down a lot more than gold has so far. That's one of the reasons I started in the silver.
I wrote about this company You On Demand Holdings YOD last year. The stock is up 69% today and closed at $5.62. I wrote about it when it was in the $1.50's a share. It looks like the big run today is from some pump from a Seeking Alpha article. This company C Media just upped their investment a little in the company which seems pretty arbitrary. The stock also has a low float which is some of the reason for the run.
I posted IFON on the blog not that long ago when it traded at 1.54. It is now at 2.92 incredibly. I have another short sell watch. The same kind of setup as CDTI that I posted on awhile back. The ticker is GFOX and the company is Grey Fox Petroleum. It trades on the OTC and I'm not sure there are currently any shares available anywhere to short. This is a good short setup forming though. It is up this month from $.80 a share to $2.24 currently. It barely even traded any shares before November. It also has zero revenue. Buy volume is getting exhausted.
ZLCS ran all the way to 2.25 intraday, however, I wasn't watching it during the day and missed any opportunity to lock in a profit. It subsequently reversed and closed lower. This is very bad price action for a breakout and I will be selling ZLCS tomorrow on any weakness. It will be about a 7% loss. UCO alternatively is acting very nicely and I plan on staying long this for some time.
I'm long a couple position trades. After stalking oil for awhile I put a buy stop for UCO the oil ETF in at 29.75 a share a couple days ago. I got filled on UCO and am now long. I'd like to keep this on for weeks. I also bought ZLCS a pharma company. I got filled in the 1.90s a share. Couldn't have asked for a better print on the day. A nice hammer. I expect this to run a lot after it hits over 2.00.