Usually I believe that, with respect to takeovers, the stockmarket is efficient. But when PEOP announced that it would be bught for less than 2 cents a share, it traded over 15 cents a share for a long time. Was I wrong to short a lot of it at these seemingly high prices?
Jun 10 2002 9:14 AM In Play PeoplePC (PEOP) 0.10: -- Update -- As there still appears to be confusion about the purchase price of PEOP by Earthlink (ELNK) - the price is 1.71 cents, or $0.0171. In other words, the price is well below Friday's close of $0.10. Jun 10 2002 8:43 AM In Play PeoplePC (PEOP) 0.10: -- Correction -- Purchase price was 1.71 cents, not the 17 cents reported in the original 8:32 comment. Jun 10 2002 8:32 AM In Play PeoplePC being purchased by EarthLink for 1.7 cents (PEOP) 0.10: Agrees to be acquired by EarthLink Inc (ELNK) for $0.0171 per share in cash or approx. $10 mln. Pre-closing adjustments to the purchase price could raise the price per share to as much as $.0245 per share.
Just a dumb question since I have occasionally looked at something like this, but never bite. If you buy at .017 and maybe your comission rate is .01 or maybe even .005 per share, just seems like a tough trade to do? Is something like this really worth it? Thanks
There was huge money to be made here. The only downside was , that you had to trade massive amounts of shares (100k or more) and if something happened like a rival bid or squeeze you would be toast. Other than that, free money.
darkhorse, where are the armies of quant jocks working 18 hours a day when you need them!? (I'm biting my lip very hard to not say 'I told you so') -------- [edit] When did EarthLink first announce the takeover of PEOP? thanks
In all fairness, the quants are looking for risk free, and this was not it. Your max gain was 8 cents, but who knows what games could be pulled out of a hat at the last moment. 8 cents isnt much cushion.