Bought Shares of FragranceNet.com
Yesterday, my limit order for 499 shares of FragranceNet.com (FRGN) at $0.58 per share was executed. I purchased these shares in my son’s Coverdell ESA account.
I first reported about FragranceNet.com going private on May 26. FrangranceNet.com is planning to conduct a reverse split where 500 shares will equal 1 share. Shareholders holding less than 500 shares will receive $0.97 per share in cash. The cash tender offer is a 67 percent premium to my purchase price. My total cost of aquiring those 499 shares yesterday was $297.37. I expect to receive $484.03 within a year for those shares of FragranceNet.com. If there are no additional costs, that would give me a profit of $186.66. That’s not a huge amount, but it is a nice rate of return.
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10 Responses to “Bought Shares of FragranceNet.com”
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FragranceNet.com Performance - Fat Pitch Financials[…] I purchased the 499 shares of FragranceNet.com all the way back on June 7, 2005. I got those 499 shares for $0.58 a piece. My total cost, including commission, was $297.37. I made $186.66 on that trade, which is a 63% gain. Given that investment took 204 days, that trade had 139% APY or using my new metric it comes out to 112% average annualized rate of return. […]
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Special Situations Real Money Port Update - Fat Pitch Financials[…] FRAGRANCENET COM […]
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Special Situations Real Money Port on Fire - Fat Pitch Financials[…] FRAGRANCENET COM […]
#1
Emailed the company 2 days ago and they said the
shareholders meeting with vote would be at the end
of June or begining of July. Why the large price drop?
#2
These thinly traded companies have large price swings. The price dropped on very low volume, so I wouldn’t be too concerned about that. I haven’t seen any news or SEC filings within the last few days either, so it is likely just random price fluctuations due to low volume.
#3
I believe the price dropped because of the Capitol First news release, which contradicted the proxy statements. Essentially, Capitol First (CFRC) wrote that it would cash out all shareholders with less than 2,000 shares. After the vote, the company issued a press release which stated only record holders would be cashed out, so all hell broke loose and more than 160,000 shares traded on the next day, including many shares of FRGN. My suspicion is that people in CFRC also bought FRGN and started to think that if CFRC could summarily change the rules, why wouldn’t FRGN. The fact is CFRC issued an erroneous press release - in their favour.
#4
Ameritrade rep stated that it sometimes takes 3-4
weeks to get shares converted from “street” to
“record”. I hope it will get done faster for my
NEIB with the vote June 15, or I may be in a pickle.
#5
I got my 499 shares at 44 cents today. Does any
have a date for the shareholders meeting or any other news?
Thanks
Mat
#6
I believe FragranceNet.com is planning on holding their shareholder meeting to consider the going private proposal sometime this month. See their preliminary proxy filing for the details. The exact date of the meeting has not been disclosed yet, as far as I know.
#7
This seems like a very ‘interesting’ situation. I have never participated in these type of deals and have a few questions. It is fairly obvious as to the cost to get into the deal, just the commission. I purchased my ‘allotment’ at $0.49 just to get in and start to follow these deals. However, I have many questions that maybe can be answered by those who have participated in similar deals in the past.
1.) What, if any, are the costs to finalize the deal is shares are held with a broker in street name, would this be considered a voluntary reorganization?
2.) Is there typically any notification that needs to be made to the broker to cash out, or this this automatically process by the stocks transfer agent?
3.) What is the relative percentage of these type of deals that do not go through?
4.) What is the percentage that get repriced?
5.) How about final proxies where the total number of shares to be reverse split is reduced.
6.) Once a deal is announced will it typically get transacted within one year, longer, shorter? What is the longest anyone has seen one of these situations drag on for?
Thanks for any feedback.