Good news! The JLN transaction seems to be moving right along. My shares in Scottrade are now listed as JLN.C1. Now it is just a matter of time for those shares to be delivered out and my cash (at $10.21/share) to be deposited in my account. Congratulations to anyone else who took part in this arbitrage opportunity.

So…my two most recent arbitrage plays are currently being fulfilled. It’s time to find another opportunity or two. I’ve got a busy few days ahead of me, but I hope to spend some time next week doing some research. In the meantime feel free to share any ideas or opportunities that you have come across. Thanks!

Here are all the posts related to JLN:

Matt brought JLN to my attention on December 20, 2007

My first post on the JLN arbitrage opportunity on December, 21, 2007

My purchase of 199 shares on April 9, 2008 for $7.60/share

My cautionary post regarding the conditions of the transaction on April 29, 2008

My May 8, 2008 update after the May 7 shareholders meeting

As you are all aware May 7 was the date of JLN’s shareholder meeting. From what I can tell everything has gone according to plan. After the meeting they filed a notification of their voluntary withdrawl of their shares from listing and registration. This notification does not detail the terms of the withdrawl, but it also does not give any indication that the terms have changed from what was previously released. For this reason I am farily confident that those owning fewer than 250 shares will be cashed out at $10.21. Again, this is my opinion based on my analysis of the information available to me. I cannot make any guarantees. I believe this filing will be followed up by a more detailed Schedule 25. So I’ll keep you posted. Here is the text from the most recent filing:

Pursuant to the requirements of the Securities Exchange Act of 1934, Jaclyn, Inc. certifies that it has reasonable grounds to believe that it meets all of the requirements for filing the Form 25 and has caused this notification to be signed on its behalf by the undersigned duly authorized person.

May 7, 2008

There has been movement with the Critical Path (CPTH) shares in my Scottrade account. It will only be a matter of time before I receive the cash ($0.102) for each share (purchased at $0.076). I’m not overly excited about this movement because, I already sold 12,500 of my 13,000 shares for $0.10/share a month ago. I just have $50 worth of shares left (unfortunatly I wasn’t able to sell the remaining 500).

In a recent post I explained the upcoming Allscripts merger and that I was considering purchasing more shares. At the time of that post I made a limit order for more shares. That order was fulfilled on May 1 at $10.38/share. In the subsequent few days it has increased to nearly $12/share. I believe that this merger (as long as it goes through) will be a great thing for MDRX, though it may be rough for several quarters following the merger (I understand that there are some issues with some of the software that will need to be worked out).

I just wanted to say thank you to the many vistors to this site. I never anticipated the readership of this blog to grow as it has. I started this blog nearly one year ago - more or less just to keep a record of my investing and occasionally share some ideas. In the last year I’ve had over 1,600 visits and several hundred of you have turned into loyal readers, checking the site at least once a month. While these numbers aren’t astronomical, I am pleased - especially considering that arbitrage investing (which is what most of my posts are about) is a small niche “market”.

I have appreciated the many comments. You all have been very helpful, to me and to one-another. I would love to hear from more of you. Feel free to share your investing strategites, ask questions, or point out when I’m wrong. I appreciate your feedback and I do my best to respond to your comments.

Don’t forget to subscribe to this blog so that you can stay up-to-date. You can subscribe to the RSS feed in a feed reader, or you can subscribe by email (you will get a message each time I make a post). Also, another great feature is that you can subscribe to the comments made by other visitors.

I hope you will continue visiting and sharing your thoughts. If you have a related blog or website I’d love to check it out!

Thanks!
RyanHegs

The JLN reverse split arbitrage opporunity is beginning to sound a little more risky. JLN recently reminded us of the conditions of the arrangement in an 8-K dated April 25. Below is some selected text from the statement:

The Company’s notice to the AMEX of voluntary delisting was conditional. As announced previously by the Company, the Board of Directors and the special committee determined that a delisting of the common stock requires that, among other things, each of the following conditions be met:

• approval by the Company’s stockholders of the reverse stock split and the forward stock split proposals;

• the common stock being approved for listing on the OTCQXSM tier of Pink OTC Markets Inc. (formerly Pink Sheets, LLC), with at least two market makers having indicated their intention to make a market in the common stock after delisting and deregistration of the common stock; and

• neither the Board of Directors nor the special committee has determined (either before or after approval of the Company’s stockholders of the reverse stock split and forward stock split proposals) that the delisting and deregistration of the common stock is no longer in the best interests of the Company or its stockholders.

It is important to remember that these are not entirely risk free. There is a good bit of concern in some online discussions that this may not go through. We won’t know until May 7. I could sell my shares now for a small profit, or I can hold out and make quite a bit more (but also risk losing nealry the same amount). I’m only backing out of this one if I can make about a dollar more per share than where JLN is currently trading (which is highly unlikely). I’ve lowered my limit order on the sale of my shares, but only a little.

On March 17 I purchased more shares of Allscripts (MDRX).Little did I know, the next day they would announce a merger with Misys, a british company that offers a similar service. If the merger goes through Allscripts will triple the number of physicians that use them (150,000 physicians or 1/3 of all U.S. physicians).

As a result of the deal Allscripts shareholders will retain their shares and receive a special cash dividend (part of the $330 million that Misys is paying for a 54.5% stake in the company). You can read the SEC paperwork here and a TIME article here.

I’m excited about this opportunity for Allscripts to grow. I’m considering purchasing more shares now as I feel that they are still undervalued.

Whenver I make an buy in an arbitrage play I always immediately create a limit order to sell the stock slightly lower than the cash-out price. This way, in the event that the stock price jumps considerably, I am able to get my money out a month or two sooner (to re-invest) and I only come out a few bucks short of what I would have made if I waited the duration. I personally feel that this is worth it as I can re-invest immediately and it eliminates some of the risk.

When I bought Critical Path (CPTH) for $0.076 in December I put in a limit order to sell at $0.10. The cash-out price was $0.102. Today Scottrade sold 12,500 of my 13,000 shares. So I made a $300 profit and did not have to wait for the arbitrage play to work itself out. Had I waited I would have made an additional $25…so I’m happy with the trade. It does stink that I’m stuck with 500 shares…but in time they will be bought back at the $0.102 rate.

My original post about the Critical Path Arbitrage Opportunity.

On Monday, I purchased 199 shares of JLN for $7.60/share. On May 7 shareholders will vote on a 250:1 reverse split (read the DEF14). Fractional shares will be bought for $10.21/share. A special thanks to Matt for pointing out this opportunity back in December. I had forgotten about it and was recently reminded of it by a post on the “Free Money Board” at Investorshub. Shares are now trading at $8.28/share. I should make about $500 on a $1,500 investment…in the ballpark of 25%. If you buy now there is still an opportunity for 15-20%, just remember that this is not entirely risk free. Do your own homework and use your own judgement.

I purchased more Allscripts (MDRX) yesterday (Monday, March 17) at $8.80/share. I’ve owned Allscripts for over 2 years now and it has been an interesting ride. I felt that $8.80 was cheap compared to where it has traded lately. I have to be honest…I probably didn’t research the desision as well as I should have. It was a little of an emotional purchase I’m sure as I’d like to regain my losses. I figured was a bit undervalued as the market was down quite a bit that day. MDRX jumped to $11.04 today and closed at $9.75 (better day in the market). I plan to hold onto MDRX for quite a while as I like what Allscripts does and think that it has a good future ahead of it.