Free CVR with Jounce Therapeutics (JNCE)
On March 27 Jounce Therapeutics (JNCE on Nasdaq, filings) has entered a transaction to be acquired by Concentra Biosciences. The company will be acquired for 1.85 USD plus a non-tradable CVR. I expect the transaction to be close soon: in one or two months. See also the press release and here for more details.
Today and last Friday the shares closed at 1.85 USD. That means the implicit price of the CVR is still zero, zip, nothing. This is a failed biotech and net-net. I think the liquidation value of the company is much higher than 1.85 USD per share. That said, this low-ball offer will probably succeed.
The CVR will pay out if the acquirer manages to monetize certain (intangible) assets within a year after the deal closes. I think this is extremely unlikely, as is reflected in the implicit price of the CVR.
The problem with extremely unlikely is that humans underestimate how unlikely. We saw that a couple of months ago with the soccer: Saudi-Arabia against Argentina. Bets for this game were also mispriced.
Therefore, on a statistical basis I guess getting this CVR for nothing is a very good deal.
Disclosure: long shares of Jounce Therapeutics.