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Technology Stocks : PALM - The rebirth of Palm Inc.

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To: kcmike who wrote (172)3/1/2000 12:51:00 PM
From: Greg S.  Read Replies (1) of 6784
 
Right, and that arbitrage reflects the uncertainty that it's actually a done deal. After the TDFX/STBI merger was announced, STBI appeared to have the most to gain and it had a lower stock price. As a result, STBI traded at a slight discount from its corresponding value as shares of TDFX. Since the merger ended up going through, buying STBI was a cheaper way of buying into TDFX than buying the actual shares of TDFX. But again, that's because there is some uncertainty there.

And I think there's plenty of uncertainty in the case of PALM and COMS. Thus, a large arbitrage is warranted. So again I say that you can make a decent buck on that, but it is by no stretch of the imagination "guaranteed".

-G
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