Intel Strategy for Achieving Wealth and Off Topic Message Board

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Technology Stocks : Intel Strategy for Achieving Wealth and Off Topic

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1:44 PM EST

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To: Sonki who wrote (13102)	11/12/1997 2:20:00 PM
From: Xpiderman	Read Replies (1) of 27012

Sonki and all, please look into WCOM/MCIC merger, I think WCOM/MCIC arbitrage is still very profitable (20+% in 7 months), the risk is the deal falls apart. Here is paret of the press releass: WORLDCOM AND MCI ANNOUNCE $37 BILLION MERGER $51 IN WORLDCOM STOCK PER MCI SHARE ... ... Approval Process The merger agreement is subject to the approvals of MCI and WorldCom stockholders as well as approvals from the Federal Communications Commission, the Justice Department and various state government bodies. In addition, the merger is subject to review by the European Commission. The companies anticipate that the merger will close within six to nine months. Terms The actual number of shares of WorldCom common stock to be exchanged for each MCI share owned by investors in MCI other than BT will be determined by dividing $51 by the 20-day average of the high and low sales prices for WorldCom common stock prior to the closing, but will not be less than 1.2439 shares (if WorldCom's average stock price exceeds $41) or more than 1.7586 shares (if WorldCom's average stock price is less than $29). for full press release click: mci.com Based on the above merger terms, the numbers were summarized as following: WCOM MCIC Ratio 20-DMA Value (#WCOM per MCIC) $50.000 $62.195 1.2439 $49.000 $60.951 1.2439 $48.000 $59.707 1.2439 $47.000 $58.463 1.2439 $46.000 $57.219 1.2439 $45.000 $55.976 1.2439 $44.000 $54.732 1.2439 $43.000 $53.488 1.2439 $42.000 $52.244 1.2439 $41.000 $51.000 1.2439 $40.000 $51.000 1.2750 $39.000 $51.000 1.3077 $38.000 $51.000 1.3421 $37.000 $51.000 1.3784 $36.000 $51.000 1.4167 $35.000 $51.000 1.4571 $34.000 $51.000 1.5000 $33.000 $51.000 1.5455 $32.000 $51.000 1.5938 $31.000 $51.000 1.6452 $30.000 $51.000 1.7000 $29.000 $50.999 1.7586 $28.000 $49.241 1.7586 $27.000 $47.482 1.7586 $26.000 $45.724 1.7586 $25.000 $43.965 1.7586 $24.000 $42.206 1.7586 $23.000 $40.448 1.7586 $22.000 $38.689 1.7586 $21.000 $36.931 1.7586 $20.000 $35.172 1.7586 Currently, the WCOM 20-DMA is about $34, so MCIC should be worth $51 according to their agreement. But MCIC is now trading at $40 - 42, so arbitrageur still can make a nice profit by long MCIC and short WCOM. Actually, I did see WCOM short interest bloomed in last several weeks.

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