Thursday, October 05, 2006

Closing Out the First Position:

Since first written up on 9/21, Aegis Communications has appreciated from $.043 to .0475 . That is a 10.5% pre-tax return in 15 days. At this point, the stock offers 5.2% further appreciation potential for a deal that should see a payment recieved within 2 months. This is still a respectable 30%+ annualized return, and would be worth it the opportunity was essentially riskless. Unfortunately, as mentioned in our previous report, the closing of this deal had a risk involving the necessary court overridings. Though the approval of this seems likely based on incentives, the legal issue is still beyond my comfortable understanding. And, if the deal were to fall through, the investment would likely get decimated So, with the arbitrage position no longer as favorable as before, today marks the closing of the first investment on this site. (Note: in the near future, i will attach an excel file that will record the buys, sells, and dates involved in recommended investments)

For original write up on Aegis on 9/21, click here.


Anonymous said...


Just a quick question--did you actually make this trade, or is this more of a Gedanken experiment? I ask you because I am interested in finding out how you were able to make a profit on the trade once commissions are included. (I ask because I'd like to know what broker would allow you to profit on trades where you are making $0.0045 per share.)


Nnejad said...

I did actually perform this trade in my E-trade account. I bought 400,000 shares at an average of .043 and cashed all the shares at .0475. The commissions totaled only $30($10 per order, 2 trades for the purchase and 1 trade for the sell). This compares with the $1800 i made on the trade.