BSC trading at >$3?

Discussion in 'Trading' started by HotTip, Mar 17, 2008.

  1. HotTip


    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?
  2. Umm, covering? up to $4 1/4 PM...then take her down and whipsaw her around...
  3. 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
  4. HotTip


    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.
  5. empee


    they would buy JPM and short BSC then.
  6. 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.
  7. Daal


    they are betting on the chance shareholders wont approve the deal
  8. HotTip


    Do shareholders even have a choice at this point?
  9. Daal


    this deal is set to be close in june, shareholders by law need to approve this
  10. ener555


    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.
    #10     Mar 17, 2008