MEDRELEAF CORP T.LEAF

Gap between ACB and LEAF

[dhesi11]

The gap is getting even larger today at 24%, the gap should be around 16%. I except this to narrow. 

Sell ACB and buy LEAF, as you are getting a 24% discount.

[Swychkey]

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?

[Seraphim1]

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