51job: Buyout Deal Offering 24% Spread, Here's Our Trade

Feb. 11, 2022 12:03 AM ET51job, Inc. (JOBS)15 Comments

Summary

  • 51job in merger deal.
  • Deal offering a 24% spread.
  • I offer a better way to trade it.

I love my job concepts with text on light box on desk table in home office

HAKINMHAN/iStock via Getty Images

Merger arbs keep tack of deal spreads daily. Sure thing mergers with no regulatory or other risks offer little value in terms of IRR while deals with high risk have juicy spreads but usually are more

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This article was written by

I am an experienced individual investor who has been trading merger arbitrage stocks and options since the 90's. I am a writer with a Master of Science from Northwestern University and I truly enjoy writing articles about the stock market. I try to look for opportunities where the odds are in my favor and there is a definite edge. On Seeking Alpha my articles will aim to provide insight and favorable risk/reward for the readers.However, I am not an investment advisor so any recomendations or ideas I write about in my articles, blogs, or comments shouldn't be taken as investment advice. I recommend using my writings as a starting point to which you should add your own research or that of an investment advisor. "Any time you make a bet with the best of it, where the odds are in your favor, you have earned something on that bet, whether you actually win or lose the bet. By the same token, when you make a bet with the worst of it, where the odds are not in your favor, you have lost something, whether you actually win or lose the bet." -David Sklansky, "The Theory of Poker"

Disclosure: I/we have a beneficial long position in the shares of JOBS either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: The above article is intended to provide my opinion to interested readers. To the best of my knowledge, the information presented above is factual but its accuracy cannot be guaranteed. The article should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect my judgment as of the date of publication and are subject to change. Readers are strongly encouraged to complete their own due diligence on any stock or option mentioned in this article before investing. I have no knowledge of individual investor circumstances, goals, portfolio concentration or diversification. I am not a licensed investment adviser. The information contained in this article is provided for general informational purposes and is not a substitute for obtaining professional advice from a qualified person, firm or corporation. Merger arbitrage is a risky strategy because there is significant downside in the event of most deal rejections.
I am long JOBS stock and short the Dec 60 call and Long the Dec 50 put.

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