I had posted yesterday on the small position that I had created in Midday at Rs 38.2 as part of the merger process. I promptly exited the position today at Rs 40.2. A gain of about 5% in 15 days. Might not sound too exciting for most ppl but I like trades like this. If I can do just 5 -6 trades like this in a year on assigned capital, i would be more than happy. Attaching the payoff matrix. Will continue to track the situation to see how it finally progresses.
6 comments:
hi ninad,
im relatively new to the blog, so i couldnt understand the deal- i mean wheres the bargain?
please could u share the numbers?
thanx
In your worksheet, shouldn't the no of shares in Midday be 5 rather than 7?
Hi rayhaan
If one assumes that the residual value of the radio busines is around Rs 10 a share then the point at which I entered the position the market was pricing the residual value around the Rs 1.25.
I exited the trade around a residual value of Rs 4.3
Ninad
Hi Anil
I m a lil confused on how u arrived at 5 shares.
Cheers
Ninad
Ninad,
There is a typo in your earlier post where you said that "the ratio proposed under the scheme of arrangement is 2 shares of Jagran Prakash for every 5 shares of Midday". I think Anil has picked up 5 from there.
~Sachin
Hi Sachin
Thanks for pointing out the typo. Have changed the same.
Cheers
Ninad
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