OTCPK:GBGPF - Post by User
Post by
Demian72on Jan 16, 2018 11:33am
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Post# 27368015
HIP Share Price Puzzle - PLEASE HELP
HIP Share Price Puzzle - PLEASE HELPI have been trying hard to get my head around this but still to no avail. I would highly appreciate if someone with a higher IQ or market trading experience could clarify this conundrum:
HIP price = 1.55 (at the moment of this post writing)
CMED price = 25.50 (at the moment of this post writing)
Say I have 1000 shares of HIP. If I sell them now I am getting 1550 $ in proceeds.
Say I want to invest my proceeds to buy shares of the company slated to buy HIP (CMED).
1500 / 25.50 = 60.78 shares of CMED.
If we were to assume that the slated deal proceeds, HIP shareholders will be getting 33 shares of CMED for 1000 shares of HIP.
So, at the day of the deal, I was still the remaining HIP shareholder, I would be getting:
33 * 25.50 = 841 $ in proceeds. This would be 709 $ or 54% less than what I would receive if I sold my HIP shares today. Just to break even (i.e. get back to 1550 $) shares of the new company (CMEDHIP) would have to go to 46.96 $ per share.
NOW THE QUESTION:
1. What should make me believe with even a smallest degree of certainty that if the deal materialises, the new company's shares will not only reach 46.96$ any time soon (54 % growth) but will get higher to justify it for me to stay in as of today?
2. What should make me believe with even a smallest degree of certainty that if the deal fails to materialize, the share price of HIP will not only not fall back to 0.5$ (305 %) where it was before the deal news (remember the fundamentals have not changed since) but will grow above the current price of 1.55 to again justify for me to stay in as of today?