Friday, March 11, 2016

I closed off my Saizen arbritrage

I entered Saizen a few months ago, which I blogged about here. I just sold off today, so let's see if this arbitrage works out well.

Entry price: $1.09
Ordinary dividends declared: $0.0283
Extraordinary dividends declared: $1.056
Exit price: $0.077
Profits per share: (1.056 + 0.0283 + 0.077) - 1.09 =  $0.0713

After accounting for commission for both buy and sell, the profit percentage becomes 5.9% all in. That's not too bad for a few months of work, haha!

Whatever is left will be the escrow account, which is about $0.0895. The current price now is 0.080, so I'm leaving $0.0095 max on the table, which is about 80 dollars. I said max because they will still have some months to go in which the parties involved might claim from. I'll happy with leaving that money for others and taking mine right now.

I think more importantly, this is a very good learning experience. It's an element of luck that I got in at 1.09, which I queued immediately after the announcement of the take over. It's an element of bravery (some say a fool's courage) to hold on to your beliefs in the calculations and take action based on that. It's an element of contentment to know how much is enough and take money off the table now instead of waiting for better things to come. I have conviction and it's an intelligent bet.

But it's like that lah, I made profit, so I can talk cock and say I beat the rest of the market to invest based on what I think is right...I'm a contrarian...I'm an investor... If I didn't make profits, then I'll be blamed for chasing after a stock (which I did, considering I bought after the run up to the announcement). I'll be blamed for not having a margin of safety in my purchase, or gambling in the stock market. The signs are all there but it's the herd that pushes me to buy etc etc.

Stock market rationality...pfft


AK said...

Hi mew ge,

Love the last few lines. Hahaha.

I haven't done anything to my investment in Saizen. Too lazy.;p

la papillion said...

Hi AK,

Wow, rare guest :)

Haha, I've been in and out of saizen, so far they are good to me :) This is their last and final goodbye gift for me, sob sob

SMK said...

cannot catch fire if you didn't court it.

don't worry, will surely be back to your old self when markets inevitably rebound. ;)
in time.

joel said...

Hi LP,

Newb question...I thought you have to hold on to the stock until 15 march (books closure date) to receive the special dividends?

la papillion said...


Haha, I'm alright lah, just wondering ;)

la papillion said...

Hi Joel,

Ignore the book closure. It's more for accounting purpose; we just have to worry about the xd. If you see XD, and you sell it, you can be entitled to the dividends. Conversely, if you see CD and you buy it, you are still entitled to dividends, while the seller will no longer have it.

K said...

Hi LP,

I have a few lots of Saizen (bought from years ago) and have not been following the news. Should I sell it now? Or will share will be delisted later on?


la papillion said...

Hi K,

If you don't want to, you don't have to do anything. They might not go for delisting - the plans post completion of the exercise is still unclear. It might take until Aug/sept to figure out.