RE:RE:RE:RE:I admit, I'm confused!Rook14 wrote: I believe people are confused with this share conversion scenario because the shares of Cmed and ABC are not fixed until the merger is complete. Of course if you buy Cmed, then you know that side of the conversion. That is your fixed price for Cmed, but the price for ABC will continue to fluctuate and won't be fixed until the deal is finalized. The fact is you want ABC to be as high as possible, but if every one sells ABC, the share price will drop.
I don't understand how people can be confused here. You simply divide the current cmed SP by 3.4. That will give your new buy in price for ACB. Simple. What's confusing to me is the action on Friday. IF you think this deal will close (seems very likely) ACB should be crashing and cmed spiking. If you were a long ACB holder you should be selling and buying into CMED so you can take advantage of the discount in conversion. If you can multiply ACBs current SP by 3.4 (at any point until this closes) and that number is greater than what CMEDs current SP is you're better to buy CMED. If you ever multiply ACBs SP by 3.4 and you find CMED is trading above that number you're better to buy into ACB directly. This is very simple math. What I'm confused about, based on that theory ABC should be dropping from everyone taking advantage of the current discount by buying into CMED causing CMED to spike. We saw the opposite to this Friday.