Public trading strategy
Roku reportedly up for sale — position for a potential buyout premium
Thesis
When rumors break that a company is exploring a sale, its stock usually jumps immediately as investors bet on a buyout. If a larger tech or media company steps in to buy Roku, they will likely have to pay more than what the stock is currently trading for. Buying the stock now captures that potential buyout premium, though it comes with the risk that the talks could fall apart and the stock drops back down.
Strategy approach
Build a news-driven event strategy that enters long ROKU on D when the stock gaps up on volume > 2x its 20-day average. Exit if the stock closes below the 10-day SMA, or set a 15% profit target.
Markets and timeframes
ROKUD