I am short in IVX (sell short 31.30). Can I wait for merger and cover on 26$? Will be my profit 5.30 per share? Thanks
not that easy. Virtually all the shares will be tendered therefore if you are short after the deadline then chances are (99.9%) you will be bought in at the merger details: i.e. 50% of the short shares will turn into short .8471 short TEVA shares and 50% $26 per share in cash. (currently equivalent to about $31)
I closed for a modest profit. Holding a partially-hedged position after the deal is done would kind of defeat the purpose of a reversal (or conversion). I think a box would have been better in this situation. Thanks for the input. - d