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.
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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.