More cash just rolled into the Special Situations Real Money Portfolio! I just got $2,185.00 credited to my son’s Coverdell ESA this morning. As you might recall, I purchased AutoNation on March 31, 2006 for the Special Situations Real Money Portfolio. This was my first odd-lot tender offer opportunity that I’ve taken advantage of.
Odd-lot tender offers provide small individual investors a unique opportunity that the big boys don’t have. By owning less than 99 shares of the stock that is being tendered, my shares received preference in this tender offer since there was an odd-lot provision to the tender. The AutoNation Inc tender was very oversubscribed and most shareholders that tendered their AutoNation shares only had 26 percent of their shares cashed out. However, since I had an odd lot, my tender was not subject to being prorated. This presented a very nice opportunity.
Let me show how nice. I purchased 95 shares on March 31, 2006 for a total cost of $2,056.10. This morning I received $23 per share for a total of $2,160.00. My broker charged me a $25 dollar fee in addition since this tender was a voluntary action. My total profit was $103.90 or a 5.1 percent gain. That comes out to a 92 percent average annualized return for this 20 day investment!
If you are interested in future odd-lot opportunities, you might consider supporting Fat Pitch Financials and become a member of Fat Pitch Financials Contributor’s Corner. I post odd-lot tender offers, going private transactions, and other special situation opportunities on that section of this site that requires membership access.