Curiouser and curiouser...the spread, that is....
Today we have ADCT up over $2 and PAIR up 6 pennies on heavy volume. Trying to understand this.....
1. There was obviously plenty of supply, I think the range was about 50 cents! This suggests there are a lot of people who just want out and $18 is their number. But, why the buyers in such quantity at that level? This could be a simple arb against the anticipated .43 in four months, hoping ADCT will be at least where it is today at that time, pick up two points on the exchange. But, that is a long time to wait in this market for 10%! Now, there was surely a lot of in and out day trading as well, but this does not explain today's experience.
2. As to the value of GSPN, that goes against acceptance of the deal, but weakly so, as PAIR management has clearly thrown in the towel so who is going to run the company, whether with a pot of cash or not? It could become a factor if GSPN keeps going up and the deal spread becomes even wider. But the spread should narrow as the exchange day approaches, whatever it's doing just now.
3. Frankly, the only way out of this thing is with a new offer. That could come if some significant sales contracts for P were announced, but is otherwise very unlikely. Ergo, don't expect to hear a lot of good contract news for P before deal done. If you do, then a white knight might just ride up. Cadogan knows this, so don't hold your breath.
All in all, today was rather bizarre. Anyone else have some ideas??
Cheers,
David |
