In today’s briefing:
- STAR CM (6698 HK): Grave Accusations
- Ichigo (2337) Buyback – History and Shareholder Structure Give an Edge
- REIT Pair Trade: Long DCREIT SP/ Short KDCREIT SP
- GS AM Consortium/ Kahoot!: Extension of Acceptance Period, Spread
STAR CM (6698 HK): Grave Accusations
- STAR CM Holdings (6698 HK), a variety program intellectual property creator and operator, was listed last December and promptly gained 475% by early August. All good so far.
- Shares cratered on the 18 August (-23.4%) and are currently 76% adrift from its recent high. The reason? A viral clip from late pop diva Coco Lee discussing unfair treatment.
- The music competition show, in which Coco appeared, pushed back on any impropriety; however, its broadcaster has temporarily suspended the program. This is no easy fix.
Ichigo (2337) Buyback – History and Shareholder Structure Give an Edge
- Today after the close, Ichigo Inc (2337 JP) announced a stock buyback to go through the next 6 months. It is ¥3bn, which is not huge, but not nothing.
- It seems like a constant refrain, but shareholder structure matters.
- Ichigo has a history of doing buybacks (10% of shares out are in treasury), and the historical patterns are interesting when comparing announced intention and actual result.
REIT Pair Trade: Long DCREIT SP/ Short KDCREIT SP
- After underperforming since listing, Digital Core REIT (DCREIT SP) has outperformed Keppel DC REIT (KDCREIT SP) over the last few months.
- However, Digital Core REIT (DCREIT SP) still trades at cheaper valuations as compared to Keppel DC REIT (KDCREIT SP).
- There could be relative outperformance over the next few weeks and any underperformance can be used to enter positions in the pair. There is an important catalyst.
GS AM Consortium/ Kahoot!: Extension of Acceptance Period, Spread
- It may take some time before shareholders can see how Kahoot’s significant investments in market share and business growth pay off in a positive bottom line.
- GS AM already has c.59% and the current extension lasts until 8 September. Spread is 2.9%/15.4% (gross/annualised, assuming settlement by 13 November).
- Taking a NOK 31.2 break, the last closing share price implies just 74% probability of deal completion, however I believe the spread will close following. I’d be long the shares.
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