Odd Lots

[winjitsu]

Not speaking about the Bloomberg podcast, but rather about the nice little niche area of the market that I'm sure many folks here have tried before. Generally it involves a company launching a tender offer with an "odd-lot" provision where they accept all the shares if you hold a smaller amount. I've shared a few through the years on the "what I'm buying" thread, but figured we should probably just split out something for some of the more interesting opportunities in the market. Some highlights over the past few years have been Sila, Talen Energy, Atmos Filtration, Milrose Properties, Kenvue etc. 

Generally, these offers are one per person per brokerage account, so the best way to optimize would be to do these tenders across multiple brokerages. For example, I generally run with around four to five brokers: IBKR, Schwab, Fidelity as the three cores ones, Robinhood and Etrade as additional but with extra fees and headaches. Note for Fidelity you need to call in, but for the others, there is a web UI. 

 

To source ideas, I generally follow the following sites:

- https://www.specialsituationinvestments.com/ or https://oddlotarbitrage.com/blog/category/tender-offers-us/ or https://www.mymoneyblog.com/lennar-millrose-properties-odd-lot-tender.html

- Run google alerts on "odd-lots"

 

Right now, the one I'm tracking is DCBO (https://www.tipranks.com/news/company-announcements/docebo-launches-us60-million-share-buyback-through-substantial-issuer-bid) with a tender offer at $20.40 with odd lot preference for holders under 100 shares. So profit expected is 6.9% on 99 shares, or around $138, closing March 10th. 

Not a huge amount of money to be made, but there are several of these every year, and if you use multiple brokerage accounts like me, it adds up to a nice gift or two. 

[texual]

Just came here to say I really thought this was going to be a Joe and Tracy love fest, but sadly no!

 

Anyway, I highly recc' Odd Lots podcast, great stuff!

[pricingpower]

Anecdotally the failure rate on these has been pretty high last couple years, particularly with the multiple accounts submissions changing the cost profile.  ANEB just a tender with an odd lot provision where their original tender anything below 2500 shares was treated as an odd lot (to get down to few enough shareholders to go dark to reduce G&A) but they had an influx of odd lot buyers that killed that ability.  they ended up running an odd lot tender with a 99 threshold, even in that 300k share tender 134k went to odd lots.  A buyer for the orig odd lot provision still holding is now -70%, there is risk to these even if they can be a profitable hobby

[winjitsu]

1 hour ago, pricingpower said:

Anecdotally the failure rate on these has been pretty high last couple years, particularly with the multiple accounts submissions changing the cost profile.  ANEB just a tender with an odd lot provision where their original tender anything below 2500 shares was treated as an odd lot (to get down to few enough shareholders to go dark to reduce G&A) but they had an influx of odd lot buyers that killed that ability.  they ended up running an odd lot tender with a 99 threshold, even in that 300k share tender 134k went to odd lots.  A buyer for the orig odd lot provision still holding is now -70%, there is risk to these even if they can be a profitable hobby

Yeah Frontera (FEC.to) did the same thing. Helps to understand the motivation of the tender, like in Frontera's case the very large shareholder wanted to sell some shares but odd-lots took up too many of the shares so they scrapped the provision. 

I thought TTSH in December was going to cancel as well but they ended up do the reverse split and going into debt to fund the cash outs. 

 

Still, for DCBO, the largest shareholder is not selling and they've done this before so this one should be pretty safe. 

 

1 hour ago, texual said:

Just came here to say I really thought this was going to be a Joe and Tracy love fest, but sadly no!

 

Anyway, I highly recc' Odd Lots podcast, great stuff!

Happens to be my most listened to podcast last year, according to Spotify. Also love the show!

[COBFInfinity]

I looked at this concept quite a few years back and concluded the limited profit potential wasn't worth the time put into it. It feels good to get a high IRR on your small investment, but $138 profit doesn't move the needle on my portfolio.

[bizaro86]

1 hour ago, COBFInfinity said:

I looked at this concept quite a few years back and concluded the limited profit potential wasn't worth the time put into it. It feels good to get a high IRR on your small investment, but $138 profit doesn't move the needle on my portfolio.

 

I look at these more as a return on time than a portfolio enhancer. If you can do $138 x 5 (I do my spouse's accounts and mine) and it takes 30 minutes that's an acceptable return on time for me.

[winjitsu]

1 hour ago, bizaro86 said:

 

I look at these more as a return on time than a portfolio enhancer. If you can do $138 x 5 (I do my spouse's accounts and mine) and it takes 30 minutes that's an acceptable return on time for me.

+1. There are probably like 5 of these per year and this one is on the low end of payouts but recent examples like MRP were around $700. On CMI/ATMU payout was 4k/lot unhedged and around 2k hedged. 

Also a decent signal for capital returns. SILA & TLN have been good longs. 

[winjitsu]

https://rodalzmann.substack.com/p/coffee-money-from-the-casaastrophe?utm_campaign=post-expanded-share&utm_medium=web&triedRedirect=true

Quick look at two tender offers out right now (some tax hair on DCBO, especially for those outside Canada)

[winjitsu]

https://oddlotarbitrage.com/blog/2026/04/15/robin-energy-ltd-rbne/

[COBFInfinity]

23 hours ago, winjitsu said:

https://oddlotarbitrage.com/blog/2026/04/15/robin-energy-ltd-rbne/

 

If I understand correctly, the tiniest of micro cap companies offered to buy about 40% of it's shares at an almost 200% premium to the market price. This seems quite odd to me. Is there any history of pump and dump scams in micro cap stock tenders?

[winjitsu]

24 minutes ago, COBFInfinity said:

 

If I understand correctly, the tiniest of micro cap companies offered to buy about 40% of it's shares at an almost 200% premium to the market price. This seems quite odd to me. Is there any history of pump and dump scams in micro cap stock tenders?

I think liquidity is the issue here, and the odd lot preference only runs to 99 shares, so not much of a "pump" available. Another thing that happens is the company may pull the tender if the stock price drops too low. 

But I'd definitely take ~30 minutes to read through the company history, history of past tenders, sketchiness of the business. This one definitely runs on the sketchier side, so I won't be participating. 

[pricingpower]

No idea what situation is with this one but it can be most rational for very small public companies to do odd lot tenders at an attractive price to try to reduce their number of shareholders below the threshold were they are allowed to go dark (200 registered shareholders if I recall).  Overhead costs of maintaining a public company can be too high for it to make sense if there's not an objective to staying public (need to raise capital etc).  As enough people pile into the odd lot tender to take advantage it makes the economics self defeating though so high odds of them getting pulled/modified if no longer beneficial to continuing shareholders.

[COBFInfinity]

3 minutes ago, winjitsu said:

I think liquidity is the issue here, and the odd lot preference only runs to 99 shares, so not much of a "pump" available. Another thing that happens is the company may pull the tender if the stock price drops too low. 

But I'd definitely take ~30 minutes to read through the company history, history of past tenders, sketchiness of the business. This one definitely runs on the sketchier side, so I won't be participating. 

 

I am worried that the whole point of this is that a sketchy company made a tender offer that they plan to cancel, but gives some friend a chance to sell at better prices in the market. Probably too cynical, but these $100 profits just aren't worth the effort and concern to me.