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Strategies & Market Trends : Pluvia's Fist.com - Pluvia's Plays & Portfolio

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To: Smartypts who wrote (678)6/24/2000 4:45:00 PM
From: RockyBalboa  Read Replies (2) of 1766
 
You do not need to divide 13.9% by $16.

Look, all you need is:

How many Stratus shares are owned by METHA?
54 Million shares

How many shares has METHA itself outstanding?

36 Millions

54/36 = 1.5 (the leverage - the additional $ value in METHA per Stratus $)

How many is METHA worth (without Stratus): presumably $12.

Hence: Metha should trade at $12 + 1.5 * Stratus' price.

For example: Stratus prices at $17 hence Metha = $12 + 1.5 x $17 = $37.5
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