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Thesis Gold Inc V.TAU

Alternate Symbol(s):  THSGF

Thesis Gold Inc., formerly Benchmark Metals Inc., is a Canada-based gold and silver company. The Company is engaged in advancing its 100% owned Lawyer's Gold-Silver Project located in the prolific Golden Horseshoe of northern British Columbia, Canada. The Company is also focused on proving and developing the resource potential of the 180 square kilometers (km2) Ranch Gold Project located in the prolific Toodoggone Mining Camp of northern British Columbia, approximately 300 km north of Smithers, British Columbia. The Lawyers Project consists of three mineralized deposits that remain open for expansion, in addition to more than 20 new target areas along the 20-kilometer trend.


TSXV:TAU - Post by User

Comment by roberto146on Aug 25, 2023 9:22pm
64 Views
Post# 35606361

RE:RE:RE:RE:RE:Today's trading or lack of

RE:RE:RE:RE:RE:Today's trading or lack of "The exchange ratio has nothing to do with speculation as to the new price." 

Actually the exchange ratio has everything to do with speculation as to the new price. For hypothetical estimation, the new price is a function of the price of BNCH times the exchange ratio,  and is dependent on the price of BNCH which needs to hold steady. Now this is just a calculation, and doesn't take into account actual investor sentiment - traders may decide they hate the deal and bid down the post-merger price with no regard to purely numerical considerations. Or they may bid the combination deal higher, as they have in this case, at least for the first day.
Sometime back, July 28, (with a followup on Aug 10) I suggested a hypothetical arbitrage trade for TAU, when TAU was trading in the 50s. If BNCH maintained its 24.5 cent price until the deal was closed then by buying TAU at, say, 55 cents, when the conversion took place then 24.5 x 2.5584 = ~62.5, or an arbitrage gain of 7.5 cents per TAU share, a little under a 15% gain.
In fact the gain turned out to be a little better than that.
Another poster stated they bought old-TAU at .54, which turned out to be a pretty good trade.
If someone bought 10,000 old-TAU at .54 after the deal was announced then they gained about $1390 on the arbitrage alone after the deal completed and the first day of trade.
Buy 10,0000 at .54: $5400, value of 9,840 at .69 post-consolidation: ~$6790. Gain: $1390.
Why old-TAU was selling at a big discount I don't know..
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