CY wi is $4.70
SPWRV is $77.10
so CY is a CY wi + a .2742 share of SPWRV
so $25.76 = $4.70 + (.2742 * $77.10)
$25.76 = $4.70 + $21.14
$25.76 = $25.84
Now isn't that wonderful how the efficient markets help everything come together?
Now about that SPWR A vs SPWR B spread....
but the discrepancy between SPWR and SPWRV prices is rather striking, especially considering the fact that SPWRB will carry more voting rights than SPWRA.
Maybe you could sell short SPWR at $91.02 and buy SPWRV @ $77.50?
When the B shares are spun out, after the smoke clears, SPWRB should sell at a slight premium to A shares and you could pocket $13.52
It makes no sense to short SPWRB (SPWRV).
I suspect that short covering is moving SPWR(A) up and the market is not aware of SPWRB (SPWRV),especially given the B's cannot cover a short position in the A's.
Yes, someone pointed out that SPWRV was trading earlier today. Explains some things about CY price, but the discrepancy between SPWR and SPWRV prices is rather striking, especially considering the fact that SPWRB will carry more voting rights than SPWRA.
Volume disrepancy was large, as well. 150K shares of SPWRV traded compared to 1.8M of SPWR. Wonder how long things will take to unwind!
Implied price now is only $3.00 per share. Having been around $6.00 for the past month. And an amazingly low PS ratio. I can think of three possibilities:
- CY has just retired most of its converts. How much liquidity do they have? When will firms such as CY have access to the credit markets?
- SPWRB may, initially, sell for less than SPWRA, due to unwinding of hedging positions. Should be short lived. Especially if SPWRB changes to SPWRA upon sale (as it does today for CY).
- Unwinding of hedged positions relative to CY and SPWR.