NYSE: KATE

Kate Spade +31% over a one month holding period

Catalyst Type: Potential Mergers & Acquisitions

 

Kate Spade is an example of a company that has struggled in recent times to boost sales and margins.

It’s stock price suffered and an activist investor eventually swooped in to pressure the company into a sale.

We entered at 17.7173 following the activist taking a position and pushing for a sale. We initially estimated the sale price to be between $21/share to $25/share, and following an initial announcement that Coach, Michael Kors and LVMH were in talks to buy the company, the stock price spiked.

Given the spike moved toward the higher end of our estimated sale price range, we decided to sell the position for a tidy profit. This of course, turned out to be a good move later on with the final deal price being significantly lower than expectations at $18.50/share.

 

Our broker statement for this trade