Re: Earn 6% in the next 5 months (merger arbitrage)
 

Your birthday nonsense is gay

Re: Earn 6% in the next 5 months (merger arbitrage)
 

The cake kind of looks like a crown. Which is rather fitting, since I am the king of the stock market.

Re: Earn 6% in the next 5 months (merger arbitrage)
 

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king of the stock market

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Mods, custom title pls.

Re: Earn 6% in the next 5 months (merger arbitrage)
 

or Stock Market Peasant, if sarcasm isn't your thing.

Re: Earn 6% in the next 5 months (merger arbitrage)
 

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This one is as close to a done deal as you can get (in my opinion of course). I agree I am not a merger expert but am very familiar with both of these companies.

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Answer these three questions: 1) what would the price return to (on the closing date) if the deal did not materialize, 2) given those target prices and a reasonable discount rate (say 8%), what does the probability of this deal closing have to be for this investment to break even (in other words, what does the market say about the probability of this deal closing)? 3) given this market perception, why do you think the actual probability is even higher?

Re: Earn 6% in the next 5 months (merger arbitrage)
 

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Owning 100 stocks is not necasarily a good thing. If I ran a mutual fund I wouldn't add more stocks just to have more.

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Very true, any good mutual fund knows to put 50% in NTDOY and 50% in SIX. Shoe, I apologize for flaming you a little bit, but I just wish you would wake up to reality before you not only cost yourself, but possible others. I would be willing to wager any sum of money that you can not beat the market for 10 years straight and that you can't earn 20%-30% for more than 2 years straight.

Re: Earn 6% in the next 5 months (merger arbitrage)
 

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This one is as close to a done deal as you can get (in my opinion of course). I agree I am not a merger expert but am very familiar with both of these companies.

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Why is the stock prices where it is (rather than closer to the offer price)?

Re: Earn 6% in the next 5 months (merger arbitrage)
 

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Not too bad for so little risk.

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lol

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Yeah, isn't capitalization on arbs usually only facilitated through investing huge amounts of money? (To maximize-leverage such a short-term gain)

Re: Earn 6% in the next 5 months (merger arbitrage)
 

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given those target prices and a reasonable discount rate (say 8%)

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I think this is the part that's really not getting enough attention. Even if you just call your discount rate something comparable to high yield savings accounts (5.5% APY?) this deal becomes a lot more questionable. You could get 2.3% risk free in that savings account in 5 months, and it goes up to 2.5% if you can find a 6% account. Given that roughly half of the total return could be achieved with 0 risk I think it's hard to justify taking a bet on this merger, especially since there's not a lot of explanation. Maybe you could give some more guidance on why you feel it's nearly a done deal?

Re: Earn 6% in the next 5 months (merger arbitrage)
 

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Owning 100 stocks is not necasarily a good thing. If I ran a mutual fund I wouldn't add more stocks just to have more.

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Very true, any good mutual fund knows to put 50% in NTDOY and 50% in SIX. Shoe, I apologize for flaming you a little bit, but I just wish you would wake up to reality before you not only cost yourself, but possible others. I would be willing to wager any sum of money that you can not beat the market for 10 years straight and that you can't earn 20%-30% for more than 2 years straight.

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I could bet you, but it would be -EV for me (whether i won or lost). If i can't beat the market, i lose to you in addition to what I already lost in the market. If I win the bet, my money would have been better off in the market because it would have more than doubled in the mean time, so although I won the bet, I'd be losing out on opportunity cost. So unless you are willing to give me some pretty good odds I will not be taking any bets.