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Technology Stocks : 3DFX
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To: Andrew Shih who wrote (11237)3/18/1999 11:57:00 AM
From: VincentTH   of 16960
 
Andrew,
Re: So why is the ratio between TDFX and STBI only around .61?
Why would someone buy TDFX at 14 instead of STBI at 8 1/2?

Easy to answer. Because the conversion ratio is not 1 for 1, rather 0.65 TDFX share for each STBI share. The arbitrage ratio has narrowed quite a bit from 10% to the current 5.5%.

The wider slipage for STBI (8 1/2x3/4) makes it much harder to trade than TDFX (14 0x1/16).

//V
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