Endeavour Mining plc T.EDV

tC - TGZ and EDV

[mercedesman]

"it can simply mean that TGZ got the better deal of a good deal for both companies.  at least that's how an optimistic EDV holder has to look at it....will my shares be worth more a year from now combined vs a year from now without the merger. " tC

Pull up a 10 year chart on both TGZ and EDV.  Fortunately I have been in both for that period of time.

EDV got recognized for what it was doing west Africa in the great 2016 gold runnup. It 5 bagged and held, when most other golds retreated back to their earlier values.  

TGZ did participate in the 216 runnup but retreated.  HOWEVER, it did get recognized in the great mid 2019 to 2020 gold runnup.  And like EDV, during this latest runnup, it 5 bagged (from $ 3 to $ 15) and it has held (for the most part).

The timing for each was very differnet, but, in the end, the results very similar.

Instead of selling my core postion in the (what I hope will be) the newly merged entity, I have great confidence that (during the next gold runnup) we will see another multi-bagger return.  In my opinion much more likely to happen here than with any of the other top 10 gold Co's.  They (EDV & TGZ) are reahiing for, and have hit "the sweet spot", IMO.  The market just does not know it yet. 

Short-term noise, is just that. Who got the better deal? irrelevent and unknowable (unless judged by some short term charts).  I'm pretty sure that the smart operators within both commpanies have figured out that, combined, everybody wins!

As a shareholder of both, I will admit that being an owner of both companies has probably affected (impaired?) my judgement.   Nevertheless I am not in the least worried about this "apparent" lack of enthusiam for the merger. IMO it's all about being positioned well just prior to the runnups.

GL

MM

[marben100]

The EDV/TGZ short term price behaviour is simply a technical matter. For merger arbs, it's a obvious trade (as long as the merger completes). TGZ is currently trading @ 13.76 and the exchange ratio is 0.47. Therefore if you go long TGZ and short EDV at current prices (currently @ 29.62), a profit is guaranteed when the merger completes (0.47x29.62 = 13.92, so profit of 0.16 per TGZ share

[theCurse]

M100, You missed the point - it's pennies either way (as i eluded to in my previoius post - EDV was the better buy by 7 cents when I check at a random point in time) - just depends when you look.   so technically, you could be flipping back and forth - though you could never buy/sell much at any instance or you affect the price so you probably lose any profit on costs of the transaction

[theCurse]

Talking to myself now.  What happens if one holds a short position in TGZ - is that position automatically converted over to EDV shares.  I have found any conclusive direction on that.  anyway, the only reason for abritrage opportunities on mergers is if there is a risk of it not going through.  I don't see that at all here - unlike semafo because of regulatory issues

[marben100]

Hi tC, Can't give you a definitive answer, but I suspect the most likely outcome is that you will be "squeezed" shortly before completion date. I.e. stock lenders will demand their shares back, so that they receive EDV shares. That's one of the hazards of shorting: you can be forced to cover your position at any time if the borrow is withdrawn. After completion, lenders will

[theCurse]

So I finally found the short positions on EDV.  It was above 3 Million shares shorted prior to the TGZ merger announcement and held pretty steady at that amount until the last few weeks which has seen some covering and now 2.5 million. So it would seem that no arbitrage at all.  It would be constantly increasing.  i did not bother to do all reporting periods.  Jan 7 is the