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Serious Arbitrage Opportunity in a stock right now

J

JS80

Lifer
I don't think we're allowed to post specific stocks so PM me if you're curious.

Company has accepted a cash bid for $5.53 and is currently trading at ~30% discount. Huge discount is due to subprime lenders going bankrupt left and right. This is a done deal and the deal is supposed to close in Q2.

Upside: ~40% in 3-4 months
Downside: Somehow the bidding company renegs and stock drops to close to bankruptcy price.

Remember, do your own DD.
 
I saw that today. I also read an article or two today about a bunch of subprime lenders going tits up, so I'm somewhat leary of the deal.
 
The company agreed to the takeover in mid-Feb. Stock already took a huge beating throughout the year and it's essentially selling it's portfolio at a discount. The deal is also all cash so there is no equity risk. The deal is binding so there is some protection in that they would probably have to pay a huge fee to break the deal.
 
Originally posted by: b0mbrman
Arbitrage implies a guarantee.

Nothing involving stocks is guaranteed.
Click to expand...

Actually people who practice arbitrage frequently take on risk, albeit fairly low risk.
 
Originally posted by: jman19
Originally posted by: b0mbrman
Arbitrage implies a guarantee.

Nothing involving stocks is guaranteed.
Click to expand...

Actually people who practice arbitrage frequently take on risk, albeit fairly low risk.
Click to expand...

Then, by definition, it's not arbitrage.
 
Originally posted by: b0mbrman
Originally posted by: jman19
Originally posted by: b0mbrman
Arbitrage implies a guarantee.

Nothing involving stocks is guaranteed.
Click to expand...

Actually people who practice arbitrage frequently take on risk, albeit fairly low risk.
Click to expand...

Then, by definition, it's not arbitrage.
Click to expand...

By the academic version, it is not. I never said I disagree with you, but in real life many people styled as "arbitrageurs" do indeed take on some risk.
 
Originally posted by: b0mbrman
Originally posted by: jman19
Originally posted by: b0mbrman
Arbitrage implies a guarantee.

Nothing involving stocks is guaranteed.
Click to expand...

Actually people who practice arbitrage frequently take on risk, albeit fairly low risk.
Click to expand...

Then, by definition, it's not arbitrage.
Click to expand...

It's still arbitrage...specifically called merger arbitrage. There is a price discrepancy between the cash purchase price and the stock price.
 
Well, too late guys, the arbitragers have stepped in and are buying up all the subprimes. My stock is up 20% in AH trading.
 
Originally posted by: JS80
Well, too late guys, the arbitragers have stepped in and are buying up all the subprimes. My stock is up 20% in AH trading.
Click to expand...

Who do you use for after hours quoting? I used to use Island/Inet but now it's fee based.
 
Originally posted by: vi_edit
Originally posted by: JS80
Well, too late guys, the arbitragers have stepped in and are buying up all the subprimes. My stock is up 20% in AH trading.
Click to expand...

Who do you use for after hours quoting? I used to use Island/Inet but now it's fee based.
Click to expand...

i'm just using yahoo, which is based on Nasdaq.com

lol looks like some people mistyped their sell orders and some people got jacked lol!
 
dang - wish i'd have seen this sooner 🙂 How many shares did you get... I PMed you, so feel free to just reply on the PM 😉
 
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