TTSH: Go-Private Transaction Creates Potential Arbitrage for Smaller Accounts

• TTSH has received approval from shareholders on 12/3/25 to go private by eliminating smaller shareholders, expected to cost $8.6M and save the company $2.4M annually following delisting.
• TTSH announced a 3,000 to 1 reverse stock split, and will repurchase would-be fractional shares at $6.60/share.
• Stock currently trades at a slight discount to the cash-out price of $6.60/share, creating a potential arbitrage for holders of 2,999 shares or less.
• Current prices offer a spread of 2% and an annualized return of 27% assuming the transaction takes one month to complete.

On 12/3/25, tile retailer The Tile Shop received shareholder approval to repurchase its shares from smaller shareholders at $6.60/share to reduce the total number of shareholders below 300 and qualify to go private. While this transaction is expected to cost the company $8.6M, it will eliminate $2.4M in annual costs associated with remaining publicly traded.

This transaction will be carried out through a 3,000 to 1 reverse share split, immediately followed by a forward share split at the same ratio. Shareholders who would have received fractional shares will receive $6.60, without interest, per share they own.

In the days following the approval of this transaction, the stock was trading at $6.50-$6.55, offering an annualized return of 9.55%-20.11%, assuming shareholders receive cash in one month following their initial purchase. On 12/9/25, the share price decreased to $6.35-$6.45, doubling the ROI and raising the annualized return to mid double digits. While this sharp decline in price appears concerning, as of 12/10/25, I have not found any new reports or filings hinting at new developments in the transaction.

I believe that this arbitrage may not be fully priced in because it is limited to smaller shareholders, and the final effective date has not been publicly disclosed. I see a very small chance that this transaction is canceled if arbitrageurs significantly increase the number of shares which must be repurchased, although this was likely already accounted for.

While I am estimating that this transaction will take another month to remain conservative, it is likely to occur sooner rather than later. It appears that brokers have been given a deadline of 12/17/25 to tender shares (@arbitrageopp on X), meaning the share splits will likely be in effect the following day.

Disclaimer: I am not a licensed financial advisor. Nothing on this Blog, social media, or any other platform where I post content should be considered financial advice. Any views expressed here are my own, shared for informational purposes only. Readers should conduct their own research or consult with a licensed professional before making investment decisions.