Farmers Capital Bank Corp - looking like a great arbitrage opportunity
Farmers Capital Bank Corp - looking like a great arbitrage opportunity
(via arbitragecorner.nodblog.com)
| User | Points |
|---|---|
| czarinacleopatra | 45 |
| alexg | 40 |
| Dividend Growth... | 38 |
| sajid.karsan | 30 |
| Dividends4Life | 25 |
Re: Farmers Capital Bank Corp
I'm glad I bought this one before you posted here, but now I'm a little nervous about the final outcome of the FFKT tender offer.
You might want to be careful posting about these limited special situations. (Yes, I know I have a conflict of interest on this topic.) I've had the experience where management changes the rules if an opportunity gets too popular with individual investors. It's one of the reasons why I stopped publicly posting my table of going private transactions. I got burned once and I think I spotted traffic in my server logs from the company visiting my table just before they changed the terms of the deal. Maybe there is less risk with odd lot tender offers, but I'm not so sure.
Hi George, I also have a
Hi George, I also have a conflict of interest here :)
For one reason it is called risk arbitrage, I wished all the bad things that could happen in a trade were the company changing their terms. For one thing, over time the discount would widen (as people would realize there is much more risk in these situations), so the opportunities would largely remain. And from my experience the big blowups happen from something completely out of the blue, and not from a usual thing that normally happen in these situations.
Anyway, good luck!
George, Why are you nervous?
George,
Why are you nervous? I'm in on this one as well as those close to me...
-Nick
Nervous because...
I'm always nervous, but I guess that's a good thing for a value investor (probably not for my health though).
My experience has been that the more these deals are talked about publicly, the more likely the terms will change or profits will be squeezed down to almost zero after transaction costs.
Well I'd hate it if the
Well I'd hate it if the terms changed. Typically I wait until 4 days before the expiration to buy my shares, but this time I'm in early. Your nervousness seems normal to me!
are you only able to take
are you only able to take advantage of these arbitrage opportunities per person?
It's often per household
It's often per household according to the regulations (i.e., less than per person).
oh really? do they say that
oh really? do they say that in their filings?
On small companies I would
On small companies I would be more worried, not in a large company with billions of dollars of market capitalization. I've seen it happen as well, so far only on small going private transactions, and only one on a small company tender offer (but the change was actually just a change from an odd lot size of 400 shares down to the typical 100).
Anyway, good luck
so..they dont tell you in
so..they dont tell you in the filings?