How would you like to have to explain to your clients that, acting on buyout news, you went in hard and heavy on the target (ie $millions) and got in ahead of the crowd morons to lock in gains. The price went up over 200% from its overnight close and you nailed down more than half of that ahead of what was rapidly shaping up to be a weekend of wild debauch.

Then, in a sickening moment of realisation reminiscent of the time you locked yourself out of the motel room with only a head full of shampoo for company and a woman (not your wife) passed out drunk in bed on the other side, you recognise that...you bought the wrong freaking stock! Master of the Universe Friday morning you now have the entire weekend to think about it and formulate lines to take for the boss/clients come Monday morning.

This explanation (less embellishments) for unusual movement in the company Allied Motion comes from the not always entirely trustworthy Yahoo message boards. Yet it does have a plausible ring to it and visually looks (allegedly) like this:

(Chart source: Market Club)


Allied Motion trades under the symbol AMOT. The genuine bid target was Advanced Medical Optics whose logo is:
And who refer to themselves in literature as "Advanced Medical Optics (AMO) [NYSE:EYE]". Confused? Me neither. If you got it right the transaction looks thus:

(Chart source: Market Club)

Not Kerviel's league. But still highly amusing.


Postscript freebie
Ironically, Allied Motion (which I do not own) is itself a very tempting small cap enterprise - free cash flow yield over 20%, low debt, strong Altman Z and Piotroskis, a ridiculous PE and all the signs of being able to weather the storm with something in hand. But nonetheless not about to get bought for a 10 times premium.

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4 comments

  1. Anonymous // 1/15/2009 01:58:00 PM

    Rawdon said

    "Ironically, Allied Motion (which I do not own) is itself a very tempting small cap enterprise - free cash flow yield over 20%, low debt, strong Altman Z and Piotroskis, a ridiculous PE and all the signs of being able to weather the storm with something in hand. But nonetheless not about to get bought for a 10 times premium."

    ---RJ ...you are awesome!! When I get to your neck of the woods we'll have to create some business together! What you've done in a sentence is to distill mountains of information into a and elegantly parsimonious package. Have you seen the movie the The Player, with Tim Robbins? Throughout the whole movie they are condensing entire two-hour films into the most austere yet descriptively importantly elements, so "Top Gun" would become, "Talented rebellious pilot selected for elite fighter training wrestles with past ghosts enroute to getting laid." It is gift....

    -C-

  2. RJH Adams // 1/15/2009 06:51:00 PM

    Thanks, truly, but I'd love to have written the Ethics Exam entry of yours instead!

    Business: would love to - so semi-retirment into the lake-front Shady Pines Investment Newsletter home is a runner...

    Re: AMOT, I do believe I may end up picking some up...

  3. Anonymous // 1/15/2009 09:23:00 PM

    thanks. I liked it, but it wrote itself - I was just the medium - you know - channeling the hilarious earthiness reality of IT (you'd be hard-pressed to make it any of it up) via some otherworldly force. Sadly, though it got some laughs, I'd have expected more folks to add their own exam questions since most people in the financial business have been on that Line that Jack Nicholson talks about in "A Few Good Men", and sadly, I fear, most have (at one time or another) crossed it, probably without ever feeling that they have, and probably without feeling something akin to remorse. Look at the Swiss Banks, for example. If ever there was inverse dharma (is such thing possible?) bad kharma combined with horrid feng shui it was financially cultivated there and persists to the present.

    I can see our project now coming together: "Dharma Bank" (an old-fashioned mutual) tagline: where you can confidently make deposits for a better existence..." But we'd have to move to California....

    -C-

  4. RJH Adams // 1/15/2009 09:39:00 PM

    C said:

    "without ever feeling that they have"

    I feel the naive/puritan in these things but that is always the part that annoys me the most.

    Liking Dharma Bank but for the Ca. property taxes it means...

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