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Harbin Electric (HRBN) +68.2% premarket after agreeing to be taken private by a group led by CEO...

Harbin Electric (HRBN) +68.2% premarket after agreeing to be taken private by a group led by CEO Tianfu Yang in a deal that values the Chinese electric motor maker at $750M, or $24/share. Shares had fallen ~64% since an initial bid last October due to investor skepticism about the deal.
Comments (5)
  • HiSpeed
    , contributor
    Comments (1063) | Send Message
     
    That $24 PR sounds familiar. Stock reaction hints at high cynicism. Where's the SEC on this?
    20 Jun 2011, 09:30 AM Reply Like
  • Phill Stone
    , contributor
    Comments (78) | Send Message
     
    why isn't the stock trading around 24 bucks a share if it's being taken private at that price? seems like there's a lot of people who are calling BS on that..
    20 Jun 2011, 01:20 PM Reply Like
  • superpatrol
    , contributor
    Comments (616) | Send Message
     
    if you want to buy the stock, why bother buying the stock itself when you can put together a synthetic long position with options for $2 cheaper?

     

    one of my favorite "mispricings" is in the novermber 15-7.5 put spreads, which I sold for more than $5 today. To hedge, I sold the same call spread, receiving a bit more than $3.50. That is, I'm receiving $8.5 bucks today, and I need to pay back $7.5 bucks in november. LOL I love a negative interest loan! Of course there is risk of early assignment on the $7.5 calls, but right now, those calls are trading with some 30c of extrinsic, so assignment risk is low for a while. hopefully by the time i need to worry about assignment, this little "mispricing" is fixed.
    20 Jun 2011, 06:53 PM Reply Like
  • superpatrol
    , contributor
    Comments (616) | Send Message
     
    i mean the decembers
    21 Jun 2011, 07:38 PM Reply Like
  • vtorch
    , contributor
    Comments (288) | Send Message
     
    Bain Capital has found a way to finance the buyout of CFSG via international banks. CDB, not wanting to be left out in the next wave of Chinese company take-private financing, will be more than willing to take the dip on this one. Fraud or not, HRBN's buyout will happen, and it will open a floodgate of other buyouts of offshore listed Chinese companies that are halfway decent.
    20 Jun 2011, 08:25 PM Reply Like
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