Richard, The last place I want my money is in second tier channel cos., not with the glut I see developing in pc boxes. Not only that, but Vanstar was doing horribly during the good times. Last quarter sales declined nearly 25%. Man, that is awful. And the way they report their eps, or lack of same, makes me suspicious. We made a penny. Not counting an 85 cents writeoff here and a reorganization charge there. Yow!
So, my answer is I wouldn't touch the companies involved, so I probably wouldn't play the deal no matter how sweet the arb looked. However, if I were playing the deal, the first thing I would insure is a very large rebate on the short stock. That is often hard to get with these illiquid issues. But I wouldn't play any arb without at least an 85% short rebate, and the major players get upwards of 97%.
MB |
