Interesting Arb Opportunity?

[DesertCat]

I don't know how many of you follow the recent boom in blank check companies, but I wrote up my (lengthy) thoughts on Star Maritime on my blog and why I think there is some interesting upside in what looks to be a low risk free return.

http://stock-notes.blogspot.com/

[jumbojacks]

Hey DesertCat, when you say you bought the common in a ratio with the warrants, are you buying basically "freerolling" the warrants with your expected return on the common (e.g. Say you expect to make $100 on the common. Do you then buy $100 in warrants?)

[DesertCat]

I planned to do something like that. The problem was the warrants were 80 cents, so you needed to invest something like $20-$40 in common for each 80 cent warrant (2-4 common shares for each warrant) to balance warrant cost with common's est. profit. I didn't like putting so much into the common, so instead I just bought as many warrants as I thought I could handle a loss on, and some common to hedge me.

Unfortunately I should have written this idea up on Wednesday. Both the common and warrants are up this morning, so it's not an attractive idea anymore.