H. James,
Here's another clue. With possible M & A implications. Excuse me while I think out loud . . .
ipolockup.com
Note PlanetRx has a fair number of shares coming out of lock up soon. If you page a ways back, you'll find DSCM had some shares coming out of lock up a month or so ago. It is likely some of those shares have been sold during the trip down here. It may be a while before these show up in EDGAR.
Now think. PlanetRx still has the same number of shares out for a buyer to buy, but the float will be raised, depressing the price. And guess who will have a bunch of money at this time? If DSCM's backers can pump DSCM up over the next two or three months, any coattail riding PlanetRx might have been doing will be negated by the insiders selling into the rally. Meanwhile, DSCM will have a relatively high stock price and a war chest to boot.
If this scenario were to develop, the proper exit strategy would be to watch that difference between the prices of the two stocks. When it begins to contract, and there are signs of insider selling at DSCM and buying at PlanetRx, we'd want to leave, too, and switch to PlanetRx. TA should help in calling the point of maximum difference by calling bottom in PlanetRx versus top in DSCM. Actually, the chances of that happening at the same time are slim, so that could be slippery exercise, but in conjunction with SEC documents, we should be able to get close. Would PlanetRx set itself up for this? I could see insiders engineering a nice take out set up for themselves based on this out-of-phase lock up ending situation. Make their buys before they enter into talks so it isn't too obvious. It would seem a reasonable thing to do based on the price, which they would declare "undervalued."
Do you have any thoughts with regard to exit strategy? Or are you not trading this one?
Cheers, Tuck |
