Roku exploring a potential sale — position for the buyout premium
Thesis
When a company officially announces it is exploring a sale, its stock usually jumps immediately because buyers have to pay a premium to purchase the company. Even if a deal hasn't been finalized yet, the rumor alone creates strong upward momentum. Because Roku is a well-known player in the streaming wars, there is a high likelihood that a larger tech or media giant could step in to buy them. This makes the stock attractive as investors bet that a bidding war could push the buyout price even higher.
Strategy approach
Build a rule-based strategy that enters long ROKU on the daily timeframe when the price closes above the 20-day simple moving average and ATR(14) expands by more than 50% relative to its 10-day average. Exit if the price closes below the 20-day simple moving average, or after a 21-day max hold.