Roxgold Inc. T.ROXG

answer for Kevmax

[Possibleidiot01]

Here's the answer to your question about why not trading at the stated 40% premium.

It's all related to the current price of Fortuna.

If Fortuna had not fallen ( stayed at Friday close - $9.64 x 0.283) - the offer would be worth $2.72

But, since the stock fell to $7.90 , it's worth $2.24 (7.90  x 0.283 shares).

I'm sure there are some people who believe in Roxgold's assets who will seize the opportunity to sell Roxgold , take the capital gain, and buy Fortuna cheaply while people are questioning the rationale for the deal.

[RONNIE111]

No  Possibleidiot, you end up  with exactly the same number of shares if you sell your RoxG now at todays price, and then use that money to buy Fortuna. Or just wait and get .283 shares of Fortuna for every RoxG share you own now.    Do the math.  And if you sell your RoxG you trigger capital gain tax.   Now I agree that Fortuna looks cheap at the present price,

[kevmax]

thanks, is it just todays close? or till the deal closes,ie in a month fortuna closes 9.64 or greater our price would come up? thanks again.

[Possibleidiot01]

if the price of Fortuna goes up , the price of ROXG's shares should trade up . There should / will be a link between the two companies until the deal closes unless another offer appears or the deal is withdrawn. For instance , if Fortuna went up to $10  before the deal closes, you could sell in the market for $2.83 or close to it. That example is not likely to happen but you should get

[RONNIE111]

Yes what you say is true.  It is possible for there to be, I think it's called arbitrage , a difference develop between RoxG share price and Fortuna share price x .283.  By my calculations , at the end of trading today the arbitrage is $.0257  .   As long as it looks like the deal will complete, I would think the difference would stay similiarly small.  

[Possibleidiot01]

I did look up arbritage before my reponse ; decided to leave it out;) The technical definiton seems to be along the lines of same assets in different markets . but yes , I would agree with your thoughts.