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Technology Stocks : Avant (AVNT) -- Ignore unavailable to you. Want to Upgrade?

To: Cosmo Daisey who wrote (2019)	1/7/1998 5:40:00 PM
From: vegetarian	Respond to of 3441

>>The bet is that the merger won't happen. If it does and you are short I assume the stock would be called to be converted to worthless AVNT shares and you would be forced to cover and who knows at what price. Too risky for me.<< If the merger goes through, it needs to be approved and it will take some time until that time the shares will be pegged atthe ratio of .63 or whatever (they already are now), so you can during that time buy and cover anytime may be for a very small loss (arbitration difference between the peg ratio and current ratio due to the risk associated with the merger), so it does not have to be a risky short in that sense, the problem is MM could keep a ridiculous spread and that may be detrimental to a large short position.

To: Cosmo Daisey who wrote (2019)	1/7/1998 6:06:00 PM
From: Jonathan Greenberg	Respond to of 3441

Ok, just me thinking out loud, here. If the price of AVNT stock is below 25 at the time of the merger (say 10), the price used to calculate the share conversion (the conversion factor) is based on AVNT stock being worth 25. If AVNT stock is more than 35, the conversion factor is based on 35 (although I laugh when I think about that possibility). That much is in the Dec. 12th Edgar filing. So assume you sell TMAI short and the merger goes through. The amount of AVNT stock you get (have to cover) is based on an AVNT stock price of 25. But what if the AVNT price is 10 at the time of the merger. The amount of stock you have to cover from shorting TMAI is converted to AVNT stock, but AVNT stock valued at 25. Am I way off base or wouldn't that just be the cat's meow to pick up 15 points on a short just due to the merger? This can't be right, it's too easy. Can someone tell me why I am wrong? Thanks, JG