Sunday, April 19, 2009

Sunday Investment Club

The wild ride is over -- for now. Nyx's proposed merger of Image Entertainment (DISK) was terminated Saturday after Nyx once again failed to show up with a promised check. That makes about five missing checks in the last two months, so the market wasn't surprised. But look for DISK to drop below $1.20 a share on Monday.

Here's the press release from DISK: Image Entertainment, Inc. (NASDAQ:DISK), a leading independent licensee, producer and distributor of home entertainment programming in North America, announced today that it has notified Nyx Acquisitions, Inc., an affiliate of Q-Black, LLC, that due to Nyx's failure to pay an additional $1.0 million to Image as required by the merger agreement, Image Entertainment has terminated the merger agreement.

Jeff Framer, President of Image Entertainment, said, "Despite Image's willingness to close the merger, Nyx was unable to finance the transaction. The Company is well-positioned to grow and remains committed to enhancing shareholder value. In this difficult economic environment, we believe the immediate need is to focus our energies on our business."

Since Corkface and I both loaded up on DISK, this is a bit of a disappointment. But since Corkface's bank put-options lost most of their value this past week (Bank stocks are rocking. Too bad I didn't hold onto those BAC calls!), me and Grandma are catching up. I sold my DISK at Friday's close of $1.35, a $400 profit.

Corkface is hanging onto DISK for the long run. Or he's back in Rome, with his hottie Anne Marie, and forgot to check in. I might be tempted back into DISK Monday if it drops below a buck. First reason, we know DISK wants to sell itself. Current ownership has better things to do with the cash. Second, DISK is in demand. Nyx is DISK's third announced suitor in three years, one of which, Lion's Gate of London, offered over $4 a share. Third reason, darn if DISK didn't start making money last quarter. They're signed several promising new distribution deals since the first of the year. Business is growing again.

So what the stock market crashed, lending virtually dried up, and Nyx couldn't get financing. DVD production and distribution is a very hot package. DISK could be a hot item again when Bernacke's Billions find their way into the system and lending picks up. I like the idea of buying DISK Monday at 90 cents and selling next winter at $2 or $3 when the new merger comes along.

The latest stats:

Corkface’s Portfolio
20 June 20 puts HBC 700
2000 shares MBRK 2,700
500 shares TSYS 4,435
4000 DISK 5,400
Cash $672
TOTAL $13,325

Austin’s Portfolio
2000 OMEX 6,760
Cash $5620
TOTAL $ 12,380

Grandma's Portfolio
13 shares of SPY 1,132
Cash $9,039
TOTAL $10,171

1 comment:

Austin Carr said...

I bought 5,000 shares of DISK this morning for .98 cents each, or $4,900. Leaves $720 in cash.