What I do not understand is if an investor has the choice between EXM and QMAR why would he buy EXM.There is a premium between both shares.I agree that every day the premium is going lower as the date of the takeover is nearer unless some investors believe that there is some posibility that the offer by EXM might be rejected by QMAR shareholders.Just a thought.
do the math. exm @ 29 qmar @23.50 exm goes to 35 for a 20+ per cent gain (29 to 35) qmar would be converted into 27.29 (35 x .4084 + 13) for a 16 per cent gain (23.50 to 27.29) at the time of the merger if exm is 32.50 or less, qmar is the buy. if exm is more than 32.50, exm is the buy
I think it is pretty clear what is happening to the share price of EXM. Nothing fundamentally different today from yesterday yet shorts have driven the price down over $1.00. You would think EXM would be moving up with interest rates now this low. The global economy will start to pick up not slow down now.
Before the takeover EXM used to trade about 55 % of the price of DRYS.Presently DRYS trades at $61.50 so if the takeover was rejected by QMAR shareholders or failed (lack of loans) EXM should move near $34 and QMAR would collapse until another buyer is found.I think the takeover will succeed
I will say this, shorts are all over EXM today. They are hell bent on driving down the share price. If longs can hold the share price and close up then I think you will see one hell of a short squeeze pushing it into the high $30's.
i am somewhat green about shorting, so please explain. I understand going short in anticipation of a stock's selloff, but why should I be interested in aggressively DRIVING the price of the stock down--I mean unless I want to buy some of it at a much lower price. Why does anyone want to destroy a stock?
The risk of buying QMAR is there is a chance the deal does not get done. Take a look at the recent deals not get done today, the risk premium is greater today than it was when it was announced. That is why you just buy EXM.