Hi Tim,
I do not post much, but I'm sure you've seen me around.
I posted this on Market Gems, but I thought I'd mention it here too.
On Monday at the close, I took a position in TELC at 9 1/4. Telco Systems (TELC) is scheduled to merge with World Access (WAXS) at the end of September. The conversion rate is .5862 shares of World Access for 1 share of TELC. At my TELC purchase price, that equates to a post merger cost basis of $16 in WAXS stock. When I made the purchase on Monday, WAXS was trading at $19, and since I have a bullish view towards WAXS as a company, I thought the opportunity to buy the stock at an equivalent price of $16 was a reasonable deal. If TELC starts to rise (Monday's high was $12), maybe I flip it for a trade. If TELC holds at its current level or drops, I can live with owning WAXS as a mid term hold at a cost of $16.
Having said all this, the merger has to go through (has been approved by shareholders, needs regulatory approval), and WAXS stock price needs to hold. WAXS has a very large short position, which is presumably related to arbitrage on this deal with TELC. WAXS has some exposure to South America for the sale of its products, so I am not going to pretend that it is a risk free investment. But the analysts have maintained a strong buy rating through the announcement of WAXS acquisitions, which I take as a vote of confidence in the business plan.
Well, I thought I'd share this with you, as Last Shadow (whose thread I post on along with Market Gems) had mentioned your thread over here.
Regards,
David |
