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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: diana g who wrote (158678)	10/20/2011 6:15:05 PM
From: Dennis Roth	Respond to of 206093

diana >> I would have known that the deal put a floor under the price << It's more like a ceiling. The arbs are not going to give nervous or impatient longs more than the deal price given the time value of money, transaction costs, and the real risk that the deal falls apart and they don't get $36.50. Shorts, under substantial margin pressure and fearing further losses if there are any developments that would raise the deal price are the only ones motivated to buy at or above the deal price. >> The 3:30-4:00 jump in price has no clear explanation I can see. But short covering? I don't think so. << I think so. When you receive the call from the Margin Desk you must cover before market close. Once the price began to rise without explanation, shorts that had tarried all day hoping for a better price, hit the panic button. A classic end of trading day squeeze. FWIW, I bought BEXP on 4/21/2010 for $17.90 I sold BEXP on 11/09/10 for $24.30 I bought it again on 8/18/2011 for $28.50 I sold it again on 10/172011 for $36.55 FWIW At the time I first saw the news of the deal, about 6 am, I had an existing Good 'til Cancelled order in place to sell the shares for $40. Realizing that I was never going to get $40 I immediately changed the GTC order to a Day order to sell with a limit of $36.55. Previous experience has taught me that there is often an opportunity to sell your shares at or slightly above the deal price on the first day, get your money and redeploy your capital without having to wait for the deal to close, as the shorts scramble to cover. Anyway, I no longer care to discuss any further why the stock spiked briefly for 30 minutes four days ago. I'm out and BEXP is ancient history so far as I'm concerned. I won't think about it again until it time to fill out my Schedule D. Best regards to you, diana. Dennis