Seeking Alpha
  • Michael Bryant
    "Getco to buy Knight Capital ($KCG) in $1.4 billion deal." And KCG's market cap is still only $600 million??? http://yhoo.it/T7hW80
    12/19/12
    Reply (12)
    • phemale60: Michael, should I take my $85 gain and get out now? think it can go up any more? Seems to be stuck at around .21-.23 --- will it tank?
      12/19/12
    • Michael Bryant: .21??? Shares are at $3.56. My post says that shares should be 51% higher if deal goes through.
      12/19/12
    • phemale60: I thought it did go thru? I bought in late a few weeks ago too high at 3.35 but have a small gain. So will hold on!
      12/19/12
    • losbronces: The final offer is at $3.75 cash or stock to the shareholders of record on the close of the transaction. Value of the deal includes debt.
      12/19/12
    • phemale60: So get out now? Does it mean the stock will move to $3.75 also? Sorry I'm a novice at this aspect. Thanks.
      12/19/12
    • losbronces: The difference between where it is now & $3.75 is known as arbitrage. A large arb number indicates doubt about the ability of the deal to
      12/19/12
    • losbronces: close. So, you can wait to get paid out. It takes time & you now know what your max gain is. A deal could still fall through, imo not likely
      12/19/12
    • losbronces: The deal is structured so that shareholders like yourself have 1st right to take cash. You should eventually get the $3.75.
      12/19/12
    • losbronces: You then need to determine if the wait is worth it. I have done this a few times, most memorable was with PALM. A few ups & downs before
      12/19/12
    • losbronces: that deal closed.
      12/19/12
    • phemale60: Thanks for the help. Now I know what "arbitrage" means when I hear it. I work with lawyers all day - not in finance. Good to know!
      12/19/12
    • phemale60: I may as well hold it. Still a good company, for what it does, right?
      12/19/12
      From other sites