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Strategies & Market Trends : Mr. Pink's Picks: selected event-driven value investments -- Ignore unavailable to you. Want to Upgrade?

To: vampire who wrote (13743)	7/22/2000 11:37:33 AM
From: RockyBalboa	Respond to of 18998

Met, that is thanks to -our well known backdoor effect -basically liquidity issues, STLW shares are scarce in comparison to METHA -no arb reasons: Yourself cite arbs who work on the exchange ratio. But, as MP mentioned, if stock can not be borrowed, a main condition to arbitrate is not met...STLW can run way ahead of METHA (then, look how little arbitrage was done between TRRA and LCOS... same reasons). -uncertainty whether the spin off of STLW is to happen as a tax free distribution (which is nearly 100% sure to happen but simply not done yet). -Time value of an arbitrage situation, if arbitrage is possible at all. Like a merger, the spin takes time to complete and arbitrageurs expect a return on the tied up margin capital until completion of the spin off. -consider MALL/UBID as the worst example with UBID up to 189 and MALL at 62 (but with an intrinsic value of around 150). Fluctuations are usual... -More recently it took awhile until COMS approached its intrinsic value. A while after the IPO, COMS traded at a veritable discount to PALM... which reduced from 34 after the IPO week and around 20 mid may to a stable $2 from Jun 13th onwards (Assuming COMS' stub value = $12). That leads me to the assumption that COMSV at $12 is perhaps undervalued. ...any opinions? (But the replacement of COMS by PALM in the S&P can distort value considerations a bit).