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Technology Stocks : HNC Software (HNCS)

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To: Red Dragon who wrote (166)11/18/1999 8:00:00 AM
From: Tom Hua  Read Replies (1) of 226
 
If HNCS plunges while Retak soars, then everyone (including myself) will buy as much HNCS as we can, because we will eventually be able to trade them in for higher Retek shares. A classic arbitrage play.

RD, let's assume you do that when RETK is soaring, what'll you do when RETK tanks afterwards? Remember shares distribution won't occur until mid/late next year and anything can happen to RETK price in that period. Take a look at UBID last December, it shot up to as high as $180s. MALL shareholders would receive 0.8 shares UBID per MALL share. We're looking at $145 for MALL shareholders right? But MALL only traded in the 30s/low 40s.

Regards,

Tom
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