Interesting EV question about trading after a buyout announcment

[schnoodleC]

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.

I due think its a worthy discussion to have so that we can recognize these opportunities when they are worthy and come along. At the same time it is good to recognize when these type of opportunities aren't as good as they seem.

[adios]

[ QUOTE ]
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.

[/ QUOTE ]

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.