17 Mile 2.0 Strategy Note 4

17 Mile 2.0

Strategy Note 4

July 31, 2017


PORTFOLIO ACTIVITY

As anticipated in Strategy Note 3, I used the proceeds from the VIAB sale on 7/26 to take advantage of DISCK weakness early on in today’s trading, bringing the position to about 2/3 of a maximum position size.

Earlier this morning in a post outlining the attractive entry catalyst the SNI deal represents, I said the following:

“So while tempting to maximize a position in DISCK into end-of-month technical weakness, the stock could very well continue to bleed out alongside arbitrageur activity.”

But not long after writing that, DISCK took another quick dive down to almost -10% on the day. I believe this is excessive, and that EOM- and deal-related technical selling have combined to create an attractive near-term trading opportunity. As such, I brought the DISCK position up to maximum size, with the view that the final 1/3 of the position can be considered “Special Situation”, with the first 2/3 a core long-term Event/General.

The SNI position is now considered a cash equivalent, and thus available as a source of funds when needed.

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