Friday, January 29, 2010

Zenotech Update

Back on the blog after a break.

I had earlier posted on Zenotech as a special situation opportunity. The link is enclosed below.

The case has had 2 rounds of hearing and now the next round of hearing is lined up for Feb 25th – 27th. From the original premise there has been clearly delay in terms of the opportunity cost of time. This will applicable if the minority shareholders lose the case. In case Daiichi loses the case they have anyway agreed to pay interest for the time delay so it isn’t such a detrimental variable.

Trade within the trade

What however interesting is the trade within the trade that I have been observing over the last few months. The stock has been inching to the 118-119 mark as we near the hearing date and then moves down to the 113 once the next date is lined up. So there is a 3-4% return on a 1 month’s time frame. Might not be good for a lot of ppl but good for me :-).

It closed at 114 today and it would be in interesting to see if it follows the same pattern as the hearing date nears.