What happened to Sprint?

Discussion in 'Stocks' started by fareastcoast, Jul 12, 2013.

  1. Does anybody actually own sprint and can comment on what happened today?

    There was a buyout of 74% of the shares. Does that mean Sprint shareholders all got completely bought out, and the new Sprint trading today is like an IPO/new issue?

    Or did existing Sprint shareholders get converted to the new Sprint shares?
     
  2. I found a bit more information:

    "Based on the elections made by Sprint stockholders, each stockholder that elected to receive stock will receive one share of stock in Sprint Corporation, and each stockholder that elected (or was deemed to have elected) to receive cash will receive a combination of $5.647658 in cash and 0.261744048 of a share of stock in Sprint Corporation."

    So stockholders that elected to receive stock traded a share that was trading at $7.18 for a share that opened today at $6.38.

    Whereas stockholders that went for the cash option would have gotten $7.29 based on the ex-div, ex-spl price of 6.28.

    So if we believe in efficient markets, Sprint share should surge at least to $7.

    Am I missing anything here?
     
  3. good call on sprint, i sure hope you made money on that 10%
     
  4. jb514

    jb514

    I don't understand why it should run to $7. If you bought shares at the close at $7.18, you would receive $5.64 in cash and 0.26 shares. If you sold those .26 shares on the open you would receive $1.67. 1.67 + 5.64 = $7.31, a profit of $0.13. There seems like there is no arbitrage profit to me, since you don't where the new shares are going to trade.