Chatham Asset Management, a major holder at FAST Acquisition Corp (FAST), recently acquired another 395,000 shares. The buy increased the fund’s stake by over 13 percent, and came to a total cost of just over $4.6 million.
The fund has been a regular buyer throughout the month of July, picking up over 1.1 million shares in total at a price of over $11 million all told. Prior to that, another major holder was a seller of shares throughout late 2020.
FAST Acquisition is a special purpose acquisition company, or SPAC. Since February, the company has had an agreement to buy Fertitta, the owner of Golden Nugget/Landry, a casino and hospitality firm.
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Shares initially rose over the SPAC’s starting price of $10 per share to as high as $14, before settling down under $12. A final vote on the acquisition has yet to be held.
Action to take: There’s been a lot of interest in the casino space lately as a way to play a bounce back in travel and tourism trends. While a smaller name in the space, it still stands to be a profitable one in the years ahead as the economy rebounds.
That makes shares potentially interesting as a buy. As a SPAC company, the price well over $10 per share is a sign that the deal is likely to go through, and that there’s value in this acquisition.
Traders could buy a call option like the October $12.50 calls, last going for about $0.72. However, without a set merger date, shares will likely trade sideways, so traders may want to hold off until a definitive merger date.
Disclosure: The author of this article has no position in the company mentioned here, and has no intention to trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.