Avid Bioservices Inc (CDMO)

[stoxx]

Thanks goodplenty100

But also hedge funds can file CTOs for periods of time. For example Eastern Capital or BlackRock in PPHM case. Just considering the past year we have had the : volume 390M, the range $.50-.28 (lid and Algo) the reason : partnership(s)/M&A, data, test kits, etc.


Here are some reasons:


Amendments to 13F filings contain two types of information: disclosure of a change in a position that was previously filed or a new holding that was previously excluded from the original filings. We define a confidential holding as one that was excluded from the original filing or the difference between the amended position and the originally filed position.


The event that best exemplifies sensitive information, and acknowledged by the SEC as acceptable motives for confidentiality, is an “open risk arbitrage,” which involves a long position in the target stock (possibly paired with a short position in the acquirer’s stock if a stock deal) right after the deal is announced. The position is expected to be reversed when the deal is closed, and the profits come from the price convergence to the offer. We use the indicator variable (M&A) for a stock of the target in an announced (but not completed) M&A deal during the one-year period ending in the portfolio quarter as a proxy for the merger arbitrage motive of the confidential filing. About 86% of the announced deals in our sample are eventually completed. We retrieve the data on M&A attempts

Needless to say, confidential treatment is not the only way that hedge funds can gain undisclosed long exposure in a stock. Derivatives contracts such as total return swaps that are traded over the counter can accomplish the same goal. Nevertheless the two approaches are far from perfect substitutes even without considering differential transaction costs. For example, when the block-building aims at influencing corporate policies or control, then the long position with which the voting rights are endowed becomes necessary. This explains why confidential treatment is constantly sought after by M&A arbitrageurs and activist shareholders.

https://www0.gsb.columbia.edu/mygsb/faculty/research/pubfiles/6037/Hedge_fund_skill.pdf