Discussion in 'Stocks' started by fareastcoast, Sep 27, 2013.

  1. Does anybody know what is going to happen with SAI on Monday? I'm trying to figure this out in advance of the start of trading on Monday so I can take advantage of any mispricings.

    Here is what I know. SAI will split into SAIC and LDOS. SAIC is basically the inheritor of SAI.

    7 shares of SAI will convert to one share of SAIC.

    There will be a 1:4 reverse split of LDOS prior to the open of the market on Monday.

    Pre-trading SAIC and LDOS closed at 35.25 and 44.15 respectively. SAI closed at 16.03.

    Here's where the math doesn't add up.

    Factoring in the 1:7 split of SAI, it has a fair market value on Monday of 112.21

    That's more than 35.25 + 44.15 so it would appear that both SAIC and LDOS are set for a massive bounce on Monday.

    What am I missing in this analysis? (note, last time something similar happened, I wasn't missing anything and made a 1 day gain of 10%).
  2. Well, purchased LDOS at the opening cross today. Should continue to drift up through the afternoon if my calculations are correct.

    Looks like there is indeed an arbritrage opportunity here.