Some readers might have noticed that I briefly published a post about selling Retail Holdings yesterday. One reader quickly noticed that there was a pretty big mistake in my sheet (note to self: maybe don’t update sheets and trade while on the train…) which does change the story a bit. I thought that a discount of 33% on the non-remittance shares would mean that there was almost no upside left in Retail Holdings, while in fact the discount is still 21.1% (pro-forma for the $10 in dividends that will be paid in the coming months). It is tempting to rationalize your previous selling decision and find a new reason to support the move, but a mistake warrants a fresh evaluation. While the discount isn’t particularly big I think I’m happy to continue owning a (smallish) position. So I decided to correct my mistake of yesterday, and I rebought today.
I still think that it was a disappointing development that the company sold their SVP notes for a nominal amount last month. They had been written down in the past to zero already, but with a face value of $32.7 million it provided a nice bit of optionality that is now definitively gone.
Author is long Retail Holdings