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Technology Stocks : STLW

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To: Red Dragon who wrote (28)7/22/2000 9:32:32 PM
From: Secret_Agent_Man   of 75
 
Red, another's opinion on the STLW v.s. METHA issue
from: InfoStream.com

-our well known backdoor effect
-basically liquidity issues, STLW shares are scarce in
comparison to METHA

-no arb reasons: Yourself cite arbs who work on the
exchange ratio. But, as MP mentioned, if stock can
not be borrowed, a main condition to arbitrate is not
met
...STLW can run way ahead of METHA (then,
look how little arbitrage was done between TRRA
and LCOS... same reasons).
-uncertainty whether the spin off of STLW is to
happen as a tax free distribution (which is nearly
100% sure to happen but simply not done yet).
-Time value of an arbitrage situation, if arbitrage is
possible at all. Like a merger, the spin takes time to
complete and arbitrageurs expect a return on the tied
up margin capital until completion of the spin off.


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