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Technology Stocks : PALM - The rebirth of Palm Inc. -- Ignore unavailable to you. Want to Upgrade?

To: David E. Taylor who wrote (4062)	3/7/2001 1:31:06 PM
From: Mang Cheng	Respond to of 6784

Arbitraging should be kicking in right now. Theoretically they should short xtnd to 22 and buy up Palm to $22 to equilize the two stocks and then let them move in tandem. But right now the strange thing is Xtnd is actually moving up (now 23.20). I think the arbitraging points are: 1. We know that the downside of xtnd is $22 - provided the merger goes thro' and Palm doesn't drop thro' 16.6 2. That if Palm goes up, xtnd will go up 3. So it's better to buy xtnd now then buy Palm because there is really not much downside risk in owning xtnd but enjoying all the upside of Palm. 4. A good strategy would be to switch from Palm to Xtnd (the only risk is if the deal fails). Mang