Opportunity to get Cresco at a 10% discount IMPORTANTE: Psuedo Arbitrage Opportunity (time sensitive) to get Cresco Shares at a 10% discount
Today's announcement on Bluma's acquisition by Cresco Labs caused Bluma to rocket but not as much as you think. Here are the details
Exchange Ratio (Cresco Share/Bluma Share): 0.0859
Current Cresco Share Price: $13.09
Implied Value per Bluma Share: $1.124
Current trading price on Bluma shares is $1.02
This represents a 10% spread which is attractive and larger than normal (in part because Bluma is a micro-cap).
The deal is expected to close at the start of Q2.
Downside Risks:
1. Cresco acquisition does not close
2. Cresco prices fall by more than 10% (you have a 10% fall cushion for this to work)
Upside Risk:
1. Cresco prices rise and you get more than the 10% upside.
(You can always buy puts on Cresco as well to hedge the fall on Cresco which is the biggest risk, but you will lose some of the upside)
Enjoy and if it works, thank me later....but remember....DO YOU OWN DUE DILIGENCE!