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Strategies & Market Trends : Value Investing

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To: gizwick who wrote (55257)	4/27/2015 3:20:44 PM
From: Paul Senior	of 78742

OT: BFCF/BBX: My understanding remains incomplete, my reasoning faulty, and my actions thereupon inconsistent with it. Ugh. I tendered all my BBX shares. The stock traded roughly at $19 on Friday. I estimated 60 would be accepted in the tender. So in tendering vs selling the stock outright on Friday in the market: For every 100 shares tendered for $20, I'd get an "extra" dollar ($20-19) on 60 shares. BUT, if it were to be so that the stock was going to drop after the tender to say $14 as I guessed, then I'd be holding 40 unaccepted shares that fell $5 dollars($19-14). So netting the gain and loss, I make $60 and lose $200 on every 100 shares submitted. In other words, I should not have tendered; I rationally should have just sold all my shares open market on Friday --if I believed the stock would fall to $14-15. This morning, looks like about 71% will be accepted and the stock is down about $2 ($19-17). Apparently the market had the drop pegged much more correctly about the fair value of the tender: For every 100 shares (71 accepted), make $1 vs. Friday closing($20-19) = about $71; and on the 29 shares not accepted, see a drop of $2/sh or $58===netting about $13 on every 100 shares tendered.

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