OATS -- worth a gamble? (arbitrage bet)

[Shoe]

Currently trading at 14.59. Whole Foods offer price is 18.50 per share, with the hearing with the FTC scheduled for 7/31.

If the merger gets approved that would be about a 26% premium over today's price. If it gets denied (which the market seems to be expecting), how much do you think OATS would drop, or is that already priced into their shares? Anyone have any good information on how likely the deal is to go through?

[DcifrThs]

sure, i'd go for it...i mean i eat oats every day for breakfast:



it's a grea arb bet because you can buy oats at whole foods for about $2.50 and apparantly, according to you, sell them back to whole foods at $18 [img]/images/graemlins/smile.gif[/img]

plus, if that doesn't work out for you, you can collect 'em and stack 'em :



Barron

[Shoe]

OATS cost 14.50 not 2.50, I am talking about the stock not the food. I don't even think they sell quaker oats at whole foods. Great pictures though!

But if anyone else has analysis to share as to if they think this is a good chance of making 20%+ in less than a week, please chime in. Note that I do not think this stock is a good long-term buy, but has the possiblity for a good short-term return.

[Evan]

[ QUOTE ]
OATS cost 14.50 not 2.50, I am talking about the stock not the food.

[/ QUOTE ]
You'll have to excuse Barron, he's a little slow.

This is not even close to an arbitrage situation.

[Shoe]

[ QUOTE ]
[ QUOTE ]
OATS cost 14.50 not 2.50, I am talking about the stock not the food.

[/ QUOTE ]
You'll have to excuse Barron, he's a little slow.

This is not even close to an arbitrage situation.

[/ QUOTE ]

If it isn't arbitrage then what is it called? There are a lot of people out there who think the government is really over-stepping their bounds here, and the merger will be approved. If that happens, the stock is going to shoot up.

On the other side, others are saying the FTC has a good case and the merger will be blocked, which would probably make the price drop further.

I'm just trying to get a better idea here. And I think it is arbitrage here. The difference between the offer price ($18.50) and the current price ($14.50). The reason for the big spread is the amount of risk involved of the deal falling through. If that's not true please tell me where i'm wrong.

[mrbaseball]

[ QUOTE ]
If it isn't arbitrage then what is it called?

[/ QUOTE ]

Speculation

[DcifrThs]

[ QUOTE ]
[ QUOTE ]
OATS cost 14.50 not 2.50, I am talking about the stock not the food.

[/ QUOTE ]
You'll have to excuse Barron, he's a little slow.

This is not even close to an arbitrage situation.

[/ QUOTE ]

WOW, either you're levelling me evan, or both of you missed the humor intended in my post

Barron

[Evan]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
OATS cost 14.50 not 2.50, I am talking about the stock not the food.

[/ QUOTE ]
You'll have to excuse Barron, he's a little slow.

This is not even close to an arbitrage situation.

[/ QUOTE ]

WOW, either you're levelling me evan, or both of you missed the humor intended in my post

Barron

[/ QUOTE ]
Okay I'm just going to stop the (apparently) high level posting and just say that I understood the humor in your post and was using some of my own.

[DesertCat]

Technically it is arbitrage, specifically merger arbitrage. Whether it's a good deal or not depends upon the deal risk. I guess the market isn't happy the deal architect is about to be fired and possibly prosecuted for securities fraud. That might undercut the possibility of success a bit.

[Shoe]

The acquisition was approved today.

Congrats to anyone who bought ahead of time for a nice 23% return in less than one month.

Unless you have done your own research and are real big on Whole foods, I would now sell this stock.

My only regret is this thread got turned into more of a flame war as opposed to legitimate discussion that could have possibly led to many more of us getting a nice return.