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Life Technologies Corporation Message Board

  • weasel_in_my_trousers weasel_in_my_trousers May 27, 2013 2:58 PM Flag

    Why the price is 74 today, not the sale price of 76.

    Since the question keeps coming up.....
    There are 2 factors at play here. The uncertainty that the sale will go through, and the fact that a dollar today is worth more than a dollar in 8 months.
    Regarding the uncertainty of the sale, I don't think there is much of that reflected in the current price of the stock. In fact when it was announced that there was a second offer on the table for $76 (it was not an all cash offer, and therefore the board took the cash one), the stock price jumped up by about $.50 - all but eliminating the uncertainty factor built into the price. If the current deal falls through (which it probably wont), there is another similar offer on the table.
    The other factor probably explains the rest of the $2 dollar difference. Money now is worth more than money later, just simple economics. so that difference in price, (representing about $2, or 2.5%, or 3.75% annual return), is the amount that your average person could make putting there money in some other investment. and sitting on it for 8 months.
    So if you want to squeak out that last $2s, hold onto Life stock until the deal goes through early January. If you think you can get a better return on Thermo, Treasury bonds, Brooklyn Bridge, whatever... sell now and enjoy whatever profit you made on ABI/Life.
    I've made money on this stock, but I'm going to sell half of it Late December, and the other half in January, effectively splitting the capital gains that I'll have to pay between 2013 and 2014. My biggest fear is not that the sale won't go through, but that Obama will muck with the capital gains rate.
    Grats longs.

75.940.00(0.00%)Jan 27 4:00 PMEST

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