Paul, it's no secret that they killed NT to get Bay to close exactly at $30 for option ex. So, they covered some NT shares and that's why the prices went up. Again, it was so clear it's amazing.
Now we have earnings for both companies come in exactly where you want them and the stocks make a predictable rise followed by profit taking. Now, we should see a few down days followed by some short covering. As the sellers dry up, the price should go up again, but as long as the street is nervous again, the prices overall will tend down so why cover shorts now.
I have also considered an interesting scene where NT short sellers cover by buying BAY and give back the NT shares when they are converted in September. Why not, BAY is a discounted share of NT.
If this were so, would it effect the spread between BAY and NT? Could short sale coering dry up, would the spread get wider? Now, we run roughly 1 point in difference between NT and Bay.
Of course there is an implied risk that the merge fails.
Also, talk of a higher bidder is all forgotten.
Regards,
Mark |
