Is holding shares until the vote riskier than it might appear? I’m thinking that holding my shares until the vote on the 27th is not such a good idea. Here’s why.
The upside is 1 cent a share if the vote passes; not much of a gain.
If the vote is NO what will happen to the share price? I’m thinking it may fall quite a bit in this case.
As much as I don’t like what management has done with this transaction and that MDG is worth substantially more in the fullness of time I’m beginning to think that in the aftermath of a no vote there is a risk of a bit of a sell off.
I’m thinking this way because there is no other party interested in paying up for MDG other than Mitsubishi. So holding shares means you expect Mitsubishi will sweeten their offer, when there are no other bidders, or you’re willing to face a possible drop in share price followed by an eventual resumption of an improving share price as the business continues to develop.
I can’t see the share price going up immediately in the event of a no vote so the near term upside looks very limited compared to the possible short termdownside after the vote.
Thoughts?