CNFL has received an SEC Notice for having an insufficient number of public shares. They have until Oct. 24 to submit a plan to regain compliance. The company "believes that the proposed Going-private Transaction represents "good cause" for which Nasdaq Staff may extend the October 24, 2007 cure period."
In my opinion, this is a slight complication, but does not violate the original thesis. Even in the case where CNFL shares are delisted, that does not preclude the GPT.
The company will execute a 1-for-250 reverse stock split in order to go private. Shareholders who own fractional shares will receive $7.25 per share, effective Nov. 13. If you can pick up shares today for $6.75 (last trade, I picked up my shares weeks ago at better prices), that should give you a 7% return within a one-month turnaround, for a 137% annualized return.
Thursday, October 11, 2007