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more follow-up on VUZI, CTL and the Fitbit spread ?2
10:19 15-Nov-19
A Vuzix director bought 2000 shares on the open market yesterday at $2.25. While I see this as more positive than the recent MicroVision purchase, it doesn't change my willingness to wait for (or miss out on) an entry point below $2.
A point that should have been added to yesterday's hydrocarbon
notes is that Brazil's big oil auction flopped.
However, that seems to be more a matter of bad procedure than a
note on immediate market conditions. Brazil will adjust, probably
next year, but the event makes Golar's current initiatives there a
little more important.
CenturyLink closing
on the sale of new $1.5b worth of new bonds split equally at 3.4%
and 3.875% is likely to get a little more attention. While
pundits will laud the interest rate savings over the LIBOR+2.25%
term loan being repaid, I note that the discount on principal
makes those overstated. CTL shares have risen to near the top of
my range, I still don't see them exceeding it any time soon.
Though the FCC approval of Sprint/T-mobile is now official,
there are still some states to satisfy. Instead, I note that this
transaction only covers about a third of the term loans and has
NOT called its CTV baby bonds. That leads me to cash in on my CTY
investment near par for 30% annualized profit, thank you very
much.
Somewhat related is the spread on Fitbit shares, which hit 8%
yesterday and is rising further this morning, despite an earnings
report
that was in-line on EPS and beat slightly on revenue. This is
enough to interest many arbitragers out there, though still
well-below my historical and targeted rate of return. Although I
have confidence that the deal will go through, the risk
pricing is another indicator of market sentiment, and a valuable
comparison to the bonds. The market continues getting excited
about more trade talk, but the cracks
in the rally are there for all to see.