MEDRELEAF CORP T.LEAF

RE:RE:Gap between ACB and LEAF

[Seraphim1]

Swychkey wrote: I follow your logic however how do you work out what the gap should be?  ie: 16% as you say?

Is the spread there because people expect ACB to drop when this closes?

Well you do some math. For numbers sake take a 1000 shares of LEAF at todays close.

1,000 x $31.30 = $31,300

now multiply the 1000 shares by 3.575 (the exchange rate to ACB) and multiply by today’s ACB close

3,575 x $10.47 = $37,430 

Therefore the arbitrage gap is $6,130 as it stands today. So for those holding ACB they are better off selling it and buying LEAF as they stand to gain $6,130. 
Finally no one really knows why the spread is there. Most likely because there are doubters that ACB investors will approve the deal. However at times these things develop for no reason and if you’re smart to take advantage of it, you stand to make a lot of easy money. For sure the gap will close as we get closer to the buyout date.