WEBMD HEALTH CORP WBMD
December 02, 2016 - 11:10am EST by
dakota
2016 2017
Price: 52.53 EPS 0 0
Shares Out. (in M): 38 P/E 0 0
Market Cap (in $M): 2,003 P/FCF 0 0
Net Debt (in $M): 0 EBIT 0 0
TEV (in $M): 0 TEV/EBIT 0 0

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  • Special Situation
  • Odd-lots
  • Beer Money

Description

Fast idea for folks in their PAs.  WebMD is conducting a buyback of ~5.1% of their outstanding shares.  The trade is to buy 99 shares of WBMD and submit for the odd-lot tender.  Owners of 99 shares or less will not be subject to pro-ration and therefore will have all their shares tendered.  At the share price of $52.53 where I bought this morning, you'll make ~$200 pre-tax or ~4%, (e.g. ~$240 less ~$10-$50 of transaction costs depending on your PA platform).  For those that care, that's a ~60% IRR.  Suggest you buy in your IRA or other tax advantaged vehicles.  Deadline to call your broker and submit shares is December 15, but I suggest calling at least 3-4 trading days ahead of that.  WBMD has ~$1.1Bn in cash on hand, and has done this before.  I ascribe the probability of them rescinding the offer as very low.

http://www.prnewswire.com/news-releases/webmd-health-corp-announces-commencement-of-tender-offer-to-repurchase-up-to-2000000-shares-of-its-common-stock-at-price-of-5500-per-share-300364089.html

 

I hold a position with the issuer such as employment, directorship, or consultancy.
I and/or others I advise do not hold a material investment in the issuer's securities.

Catalyst

Tender offer expiring Dec 15

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