I finally get to write about a stock in my line of work -- CYBERSECURITY! So awhile back, I was tracking the DMs of a few friends in my Mansa Musa Network. I don't recall which ones, but it may have been my guys from the A-Billi squad: Mario Gabelli (Gamco Investors) or Jeffrey Smith (Starboard). But long story short is SPLUNK had been underperforming in the stock world. In the regular world it's like the person that has been single for too long and is finally looking for someone to "Put a Ring on It". So, like the horrible reality TV shows of today, they announced they were looking to hook up in a very public way. I saw my buddies mentioning the value in SPLUNK, but I didn't pull the trigger early on. I was tardy and finally decided to pick up some shares ONLY when they finally announced they had found a partner. This partner was the deep pocketed company, called CISCO. They are well known for their enterprise networking and routing equipment. If you don't know what I'm talking about, it's the device most people attach to their home network for internet that allows you to have wireless or WIFI service.
Definitely do not quote me because it has been a while, but I believe the buyout price was set at $157.50. So, what I did was use a well-known trading strategy on wall street. You've heard me refer to it before at the arbitrage approach. This means if I have high confidence that the deal (or hook up) is going to get done, an investor like me can benefit from the "spread" or difference between the price of when the deal is announced and what the final buyout or hook up price is. The risk becomes IF the deal does not get done (if the bride is left at the altar), this situation becomes a train wreck. Is this possible? Yes, it is --- see my posts on Tegna. This deal was thought to be all but certain and then the FTC stepped in and said the deal was harmful for customers across the country. So, you saw a stock go from $17 to nearly $22+ and come all the way back down because the deal was under investigation and ultimately canceled.
Now back to SPLUNK. I wanted to show you all what corporate governance looks like and what ownership looks like from an investor's standpoint. I got an email telling me it's time to vote on whether I think the merger should occur. I've pasted that screenshot here. I hope and believe this means we are one step closer to closing the deal. This is a great example of how hookups can help your portfolio.
