BASP::MUSE Portfolio

During December 2005, IBM announced it was acquiring Micromuse for $9.92 per share. The proceeds from the MUSE sale (which occurred on 12/22/2005) were used to establish a portfolio invested in low-priced stocks that may have gotten artificially depressed due to year-end tax selling. The investments are intended to be long-term, but we are interested in following the short-term behavior of the portfolio

   (1)    (2)   (3)     (4)       (5)      (6)    (7)
   --------------------------------------------------
   WFII    50  5.25  12/23/2005  262.50   5.36   2.85
   LNUX   100  1.63  12/23/2005  163.00   1.88   5.03
   DSCM   100  2.62  12/26/2005  262.00   2.88   3.66
   MTIC   200  1.17  12/28/2005  234.00   1.36   0.75
   MACE   100  2.35  12/29/2005  235.00   2.47   2.56
   WFII    50  5.11  12/30/2005  255.50   5.36   2.85
   BWNG    50  6.00  12/30/2005  300.00   6.49  15.62
   LVLT    67  3.81  01/04/2007  255.50   -----  5.60 **
   ** LVLT acquired BWNG

   (1) stock symbol
   (2) number of shares
   (3) buy price
   (4) buy date
   (5) amount invested
   (6) 01/06/2006 price
   (7) 01/01/2007 price

   Invested Amount:  $1712 (excluding transaction fees)
   Transaction fee:  $  49 (7 transactions at $7 each)
    Total Invested:  $1761
Exercises
  1. Excluding transaction fees, calculate the "Invested Amount" using 01/06/2006 prices.

  2. Excluding transaction fees, calculate the percentage increase or decrease in the MUSE portfolio.

Update::2006.08.23

IBM announced they were acquiring Internet Security Systems just like they acquired Micromuse. In a couple of months an ISSX portfolio will be created. In the meantime, let's see how the MUSE Portfolio is doing after almost nine months.

   Symbol #Shares BuyPrice CurPrice  %Change
   ------------------------------------------
   WFII    50     5.25      2.10     down 60%
   LNUX   100     1.63      4.56     up 180%
   DSCM   100     2.62      2.97     up 13%
   MTIC   200     1.17      1.08     down 8%
   MACE   100     2.35      2.30     down 2%
   WFII    50     5.11      2.10     down 60%
   BWNG    50     6.00     11.02     up 84%

[exercise] Calculate current value of the portfolio.

Google.com:: 50x2.10+100x4.56+100x2.97+200x1.08+100x2.30+50x2.10+50x11.02

The MUSE Portfolio is up 14.5% (excluding transaction fees).

Update::2006.10.18

Broomfield, CO-based Level 3 Communications is buying Austin, TX-based Broadwing Corp. for about $1.4 billion in cash and stock. Level 3 is paying $8.18 in cash, plus 1.3411 shares of its common stock for each share of Broadwing.

On 16 October 2006, Level 3 ( LVLT) stock closed at $5.32 and Broadwing ( BWNG) stock closed at $13.28.

Update::2007.01.04

Level 3 Communications has completed its aquisition of BWNG. The MUSE Portfilio received $409 cash ( 50 x $8.18) and 67 LVLT shares.


Creator: Gerald D. Thurman [gthurman@gmail.com]
Created: 06 January 2006

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