Position: 86 shares - I am europoor.
Ticker: CRZBY (US ADR) / CBK (Frankfurt, ETR:CBK)
TL;DR:
A €40B Italian bank (UniCredit, ticker UCG) has spent 20 years trying to eat Commerzbank, is now \~40% burdened with it, and just made a takeover offer BELOW the current share price. The stock is sitting at its 52-week high. To actually win, the Italian whale has to raise the bid. If he walks, you still own a bank with a 21% RoE target printing record earnings. Heads I win, tails I win.
The Setup (smooth-brain version)
- UniCredit offered 0.485 of its own shares per Commerzbank share.
- Problem for them: CBK trades ABOVE what that's worth. The offer is a discount. Selling below market = regarded.
- Result: barely anyone real took the offer. The \~12% that came in is mostly UniCredit's own derivative buddies (yes, including Nomura) shuffling shares around. Not genuine sellers.
- So the offer is failing and the stock keeps ripping anyway. Near 52-week high (€38.25), +35% on the year.
Market: the price isn't high enough yet.
Why this is asymmetric (the actual bull case)
1. There's a forced buyer with no exit. UniCredit is in for \~27% direct + a pile of derivatives = \~40%+ economic exposure. Andrea Orcel can't quietly sell 40% of a German bank into a thin market without nuking his own position. He's committed.
2. The offer is a FLOOR, not a ceiling. German government rejected it for having "no appropriate premium." To get past Berlin and Commerzbank's board, the bid has to go UP. You're buying below the eventual clearing price of a strategic acquirer who has chased this for two decades.
3. The float is a brick. UniCredit \~27% + German State 12% = \~39% locked in hands that aren't selling. Add the \~12% stuck in limbo (doesn't settle until \~2027) and the actually tradable float is thin.
4. If the deal DIES, you still win. Commerzbank's standalone "Momentum 2030" plan targets \~21% return on equity by 2030, €16.8B revenue, €5.9B net profit. Record quarterly earnings already printing.
The "squeeze" - read this, don't get baited
This is NOT a GameStop short squeeze. The 10x spike in securities lending is UniCredit's counterparts hedging derivatives, not WSB-style directional shorts. Anyone selling you a "massive short interest" story is wrong.
BUT there is a real structural squeeze: shrinking free float + a deep-pocketed strategic that's \~40% committed and must either buy in the open market or raise its bid to get anywhere. If counterparts have to deliver physical shares to settle, they buy back borrowed stock - mechanical upward pressure. It's a takeover floor with a tight-float kicker, not a meme squeeze.
Risks (my wife's boyfriend made me write these) ⚠️
- Overhang bomb: if Orcel gives up, UniCredit could eventually dump \~27% → instant brick. This is the real downside.
- Deal could just rot for years as dead money while everyone litigates.
- Legal wildcard: Frankfurt prosecutors opened a market-manipulation probe.
Conclusion
You've got a 20-year obsessed strategic buyer, a bid that's too low by the market's own admission, a locked-up float, and a standalone story good enough to own without a deal.