Redbox (RDBX) is perhaps the most intriguing.
The company is being acquired in a deal that currently values its shares at less than a $1.00 a share. However, the stock is currently trading just under $8.00 and is up as much as 73% this week.
The acquisition of RDBX by Chicken Soup for the Soul (CSSE) has an exchange ratio of 0.087 CSSE shares for each share of RDBX. With CSSE currently trading at $6.22, RDBX shares would be valued at just $0.54 per share. Yet, they currently trade at $7.55, and are up another 4% in pre-mkt to $7.86.
The stock is seeing pre-market gains despite B. Riley coming out this morning with a downgrade to Sell from Neutral and reducing its price target to $1.00 from $3.00. “While we acknowledge that heightened retail investor interest and “meme” speculative trading around RDBX shares could lead to significant volatility in the coming months (that could even push RDBX shares higher from here), we believe the valuation will ultimately correct itself heading into the expected transaction close during 2H22,” comments B. Riley.