Johnson & Johnson (JNJ) Exchange Offer for Kenvue (KVUE)

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There is an exchange offer worth an estimated 7%+ profit that is available to people in the stock market who buy Johnson & Johnson stock (JNJ) and want to exchange their shares for Kenvue (KVUE) stock.

This is called an exchange offer and, admittedly, the terms of the corporate action might seem a bit intimidating to some. I've done an estimated 88 or more of these corporate actions in the past decade plus, have only had an estimated 4 losses (2 were tiny amounts) and am VERY COMFORTABLE explaining the details.

Here's the deal. Unless I get AT LEAST A COUPLE OF PEOPLE ON THIS SITE who indicate they have genuine interest in evaluating and potentially participating in the deal, I don't want to waste a lot of my time explaining a complicated deal in detail that nobody cares about.

So, the next move is yours. At my brokerage firm the deal expires on August 14th, so this is time sensitive.

Any interest on this site?

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I dont participate in the stock market stuff, but I always enjoy reading about it!

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Good- a decent amount of interest from another website is still deserving of me providing more details...

Those who've known me for a while may know that corporate actions are one of my ALL-TIME FAVORITE STOCK TRADES. I especially like odd lot tender offers (aka exchange offers). You will see why shortly.

These corporate actions, for the most part, have been DEAD since about 2017. Things go in and out of favor- I'll just leave it at that rather than trying to over-analyze the situation.

Perhaps, finally, the long drought has ended! Johnson & Johnson (Ticker: JNJ) has announced a deal where you can buy up to 99 shares of JNJ stock (closed on 7/31/23 (M) at $167.53) and exchange them for Kenvue (Ticker: KVUE- sounds like the call letters for a Western U.S. TV station!). JNJ is offering those who do the deal a potential (not guaranteed) 7%+ premium to participate.

There is no guarantee whatsoever that you will make a profit. However, that said, my Excel spreadsheet shows my record on corporate actions including odd lot deals such as this is 84-4 over the past 10+ years. Not trying to brag, but facts are relevant IMHO.

Here is (pretty specifically) how you participate if interested:

STEP 1: Buy 99 or fewer shares of JNJ stock (per tax ID, not per account). Why 99 or fewer? Anyone with 100 or more shares will almost certainly be prorated, which is a fancy way of saying they will likely take 20-40% of your shares and return the other 60-80% to you. It is a pain to make a decent profit on just some of your shares. The odd lot clause in this offer (any many I've done before) guarantees they will take ALL YOUR SHARES if you have 99 or fewer per tax ID and tender all your shares. So don't buy 99 and hold 1 for posterity sake. That would almost certainly be a mistake!

Another point- this is literally a case where someone with 99 shares has an advantage over someone with 100,000 shares. The advantage is that the company will take ALL OF YOUR SHARES if you follow instructions and tender them all properly. This is one of the few situations in life where the smaller investor has an advantage over really rich people. I ABSOLUTELY LOVE IT and take advantage of it as often as I possibly can.

STEP 2: Contact your broker about tendering your shares of JNJ in exchange for even more shares of Kenvue (KVUE) stock. KVUE, which is part of JNJ that was split off from the main company, is a much cheaper stock than JNJ (closed 7/31 at $23.68) so you should expect that you will have many more shares of KVUE than you bought of JNJ.
The exact number of shares you will get changes daily until just before this deal expires.

NOTE: The deadline to tender shares at Schwab is 1900 EST on 8/14/23 (Mon.). The deal officially expires on 8/18/23 (Fri.). A broker other than Schwab may have a different deadline or charge a fee to tender shares. Check with your broker for details. This department is often called something like Corporate Actions and often works behind the scenes.

STEP 3: Perhaps 1-2 weeks after the deal expires, you will notice one morning that your old shares of JNJ are gone and they have been replaced by KVUE shares. I will ALMOST ALWAYS sell the new shares I receive right away to take a nice profit and move onto another trade. Right away could be at the open the first day I have them, but it is typically sometime during that first day.

STEP 4: (very likely for some) Celebrate your victory and think about how learning this new skill may be one of the very best things you've ever done in the stock market. As an example, outside of my online friends I have easily 50+ friends who have taken my suggestion and participated in tender offers over the years. On one of the deals, when it was done I went back to my friends and asked how much money they made. There were probably about 50 people who did the Lockheed Martin (LMT)/Leidos (LDOS) deal in 2016. I stopped counting when my friends said they (combined) made over $500k on that one deal! That was definitely an outlier, but goes to show how good things can be. On this deal, I'd realistically expect a profit of $800 to $2,000 if you buy 99 JNJ.

NOTE WELL: I know these deals can seem complicated. If there are any questions, you can ask me here or contact your broker. Keep in mind that stock trades take 2 business days to settle. If you buy JNJ on Tuesday, you won't actually own it until Thursday. Don't wait til the last minute. Questions are welcome- I am VERY COMFORTABLE with the subject matter and feel I could easily work in a Corporate Actions department at a major brokerage firm if I really wanted to. But then I would likely be banned from trading them myself, and that would be TOUGH!

WEBSITE WITH DETAILS OF TRANSACTION: http://www.jnjseparation.com (this takes you to envisionreports.com) for details on this Exchange Offer. Scroll down below the legalese to see the specific amounts near the bottom of the screen. It is updated daily. You are expected to get $107.53 of KVUE stock for each $100 of JNJ, subject to an upper limit of 8.0549 shares of KVUE. The current projected amount of shares a/o 7/31/23 is 7.6713 shares of KVUE.

ADVANCED MATERIAL: Don't sweat this section, but some people want more advanced information so I thought I'd provide it. Sometimes these deals don't work quite as well as planned. It helps to be able to modify your attack plan to be able to profit sooner rather than sitting on a potential loss for a long time. I'll give you an example from August of 2022. 3M (Ticker: MMM) was doing an exchange offer for Neogen (NEOG). When I received my shares of NEOG stock I was under water on the deal. So I did several things to turn that around. First, I collected a dividend from the MMM stock. Secondly, I bought more shares of NEOG to lower my cost. Third, I sold covered call options on the NEOG stock I had to collect more cash. The total profit on the deal was $1,045.83 (4.0%) and it took about 5 months to get out of the deal. Keep in mind that the market wasn't acting nearly as well in late 2022 as it is now.

Please be sure to read my disclaimer at the bottom of all posts I make on this site.

Good luck to all. I look forward to hearing any feedback, success stories, etc. This should be both fun and educational at the same time. As a guy on Youtube says "Leave it better than you found it!".

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One cautionary note- for those who participate, please be sure to use a LIMIT ORDER to sell your Kenvue stock, not a market order which can be like writing a blank check. In other words, name a specific price that you want for your KVUE stock.

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Got 795 shares of KVUE today (after the close) in exchange for the 99 JNJ I originally bought recently.