Why wouldn't people be shorting this stock like crazy (IB appears to have shares available)? I don't understand why it would be trading so far above the $2 that JPM is buying it for. Any thoughts?
they're not buying it for $2 cash, they're buying it with jpm stock. people are betting on jpm increasing by the time the acquisition is completed
That would be a bet that JPM shares would increase by 50%. Pretty damn optimistic if you ask me. I buy the short covering argument more, though it still looks like a short opportunity to me.
The shorts don't need to cover. I certainly wouldn't cover at $3+/share when I know I will be covering at $2/share when the deal is done.
Does anyone know when shareholders have to approve the deal by? I was thinking what would happen if mkt either recovers somewhat by this time and/or credit crisis will improve. Doesn't the offer give BSC and shareholder some time to see how overall mkt situation develops and if it should get better the $2/share offer may not be appropriate anymore. I don't think overall credit/mkt situation will improve that much but who knows.