Outstanding decision by mgmt to duck into Stryker's arms at a nice premium. The road ahead as an independent company would have been more dilution for shareholders. fwiw, we don't think anyone will top Stryker at these levels, or be willing to pay the customary breakup fee. Sweetheart deal for management -- good for them and doing the right thing for SH.
Massive short interest here. Unless locked down, the borrow (stock loan) rate will spike above 10% by the end of the day and except for pro hedges against long positions (box shorts) all other shorts here must cover and are hosed. Panicky premarket tape is just getting going. Stock will likely trade above $30 until the massive short interest is covered.
Again, congrats to longs and management.
When the deal was announced based on the 10m SI vs 35m of float and the stock quickly ran to well above stnd arb levels and traded about 6m shares there before fading. Obviously MANY pm were thrilled to have the SI buying and hit it hard, only then was the short covering buying replaced by more disciplined arb desk trades to lock down the deal. The stock did trade as high as $29.80+ premarket The deal was fully arb'd on day 1 and all 10m shorts, including box cross covering, was obviously done in that massive volume as well. The arb spread remains fat though... but is a desk game and not for the weak at stomach.
More about what we are talking about? Fund up over 60% ytd without leverage and now hedged to 65% net exposure pending DC resolution. Review the yhoo record where we have shared select mid and big cap ideas. You can;t make up things you wrote as they were happening. LOL
Here on mako (short from 38 where we said going to $10 and stayed short until $12, then long from 12 to 15.80i). We missed the surprise pop on the deal but applaud management for bailing out after missing the last 5 Q consensus and likely not having a bright outlook for increasing system sales in the U.S.
Then there is aapl (reload long at 385) , gmcr (18 to 61 then reload at 75 on dip our at 88 and still short on the offset box short),hlf (big core at 38, many trades long since and ready to rip again), gs (89 to 145 and out early), bac in at $6 still long) , mpel (in at 12 out at 25.50, reload at 22 still ong), lvs (pulled hedged at 38 out too early as usual at 59 before recent dip and run higher), dal (several round trips between $6 and out at 23.80) , alk (almost double t12m still long), ual (paired trade short vs dal while DAL ran up 3x the rate of ual, then long when ceo bought and now short offset vs alk long), expe (in large at 48 long for run well above $50 into eoy), two nice round trip on TPX 25 to 42 then 38 to 44. There is more.
Does your record compare? LOL
Ha ha! Say whatever you want, loser. Well documented here on the MAKO board that you (and your imaginary partner) sold out of MAKO right before the 80%+ jump! It is also well documented that I said you would regret it. You have no idea what you are doing.
see greg's and my comments below, and think through why 10x the short interest has traded out since the announcement. Do some reading on merger arbitrage spreads as well... the arb desks are showing you this is a done deal at $30... and remember they are hedged in the event of a topper.
Motley Fool has a wiki that includes info on scenarios such as this one. As far as I can tell, three things can happen:
1) the sale can fall through -- this is why it's trading (just) below $30; the people buying the shares have a bit of risk that drives the sale price down (less than 2% at current levels)
2) another bid can come through -- in this case, unless you have insider information, it's probably wishful thinking, but it has happened before
3) more than likely, the shares will be sold for $30 at some point in the future; brokerages may charge a commission for this service, and it may or may not be the same commission that you pay today for selling the stock. There may be the option of converting MAKO stock to Stryker shares, which could have other benefits, including a premium on the price conversions (or it may not).
I'm no expert; I decided to sell my shares. Why look a gift horse in the mouth? I can put the money to work in other investments rather than waiting and maybe seeing the deal fall apart (at which point I could be in again as well).
A crazy ride squeezetracker. MAKO is responsible for more than a few of my grey hairs. It will be interesting to see what the Stryker of 5 years from now will look like and whether they maximize the RIO's potential. Congrats all.
Congrats to you and kaylawa... you guys have earned getting back to a decent exit here!
As for Stryker's play, they are certainly making sure no one takes RIO in front of them... all considered, they are paying afull price. LOL
Shorts are hosed here. We believe the shares will print well above $30 today as shorts are dead unless boxed against their bigger long (i.e., pro hedges). Volume should be massive today as whomever is going to arb the deal will have a desk controlling the borrow and all shares available for sale below $29.75 or so. Short dweeebs will have to py more. LOL
A long ride indeed. I have lurked here for the past few years while pulling my hair out over this stock, but thanks to donknute, squeezetracker and all the other posters that make this the best message board I've ever seen, I never sold and am now have doubled my money. Good luck to all and thanks for all your help.