Re: Interesting EV question about trading after a buyout announcment
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Yes, I know and I agree. However, we appear to have a case here where the arbitragers seemed slow to react. Most likely due to the fact that FOBB was a small and not widely followed stock with a low market cap. The spread started at 8% and closed to 1% in just a few days. Whether this is because it took the arbitragers a few days to analyze the risk of the deal or just because FOBB is small, I cannot say.
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Basically Ray's point was that many of these deals involving smaller cap, less widely held stocks "fly under the radar screen" if you will.
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