I know I said in yesterday’s post I wouldn’t be posting any more this week…. but gosh darn it, I just can’t stay away from you! Plus, this is a quick one.
Advent-E (ADVC) is going private through a reverse split followed by a forward split. The reverse split is 1 for 10,000. Shareholders who don’t have 10,000 shares will be cashed out at $0.27 per share.
However, before they do that split (it will likely go through in late January / early Feb), they’re going to pay a special dividend of $0.02 per share.
Shares currently trade for $0.26 per share. Add it all up and you’re being offered ~11.5% returns in a tight two to three month time frame. Needless to say, that’s pretty phenomenal.
There are other things to like here to- the takeout price seems much to cheap, so I would guess there’s at least some chance (albeit pretty small) of it getting raised. And the company is buying back shares like mad (~7-8% of shares outstanding in the past two months), so management clearly loves the shares at these prices. Finally, I personally think the company is way too cheap at these levels, and I think there’s some argument to be had for buying more than 10k shares and just holding for the long term.
But I’ll leave that all up to you.
The only downside here is it’s really only suitable for extremely small amounts of capital- you can only put $2,600 to work. But still- there are much harder ways to earn $300 bucks!
Disclosure- Long ADVC
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