GREY:FFLWF - Post by User
Comment by
HonestAbeon Dec 08, 2016 2:51am
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Post# 25569981
RE:RE:RE:RE:RE:If you listen to some posters said after the Merger
RE:RE:RE:RE:RE:If you listen to some posters said after the Merger Juxtaposition wrote: But if this is true Brent, then why isn't everyone selling their CGC stock and buying MT?
There are a variety of reasons. Some institutions might only be able to trade TSX stocks only and prohibited from touching TSXV stocks. Tax implications might be another concern if liquidating CGC which likely makes it infeasible just to cash in on a small arbitrage under 10%. Also, it is much more challenging attempting to buy a large position in MT (rather than CGC) due to large bid-ask spreads and sometimes thin ask offering.
Your money is also tied up for likely two months (if investing in MT) waiting for the risk arbitrage to narrow, whereas CGC could break out and offer better range trading opportunities. Although the deal is highly likely to go through without any hitches (even if 98% or 99% probability), one still has to account for the remote 1% or 2% risk of it somehow failing and some might deem it to be not worth the 6% or 8% savings if that scenario unfolds.