spp - who is participating?, page-26

surely the simplistic way to look at the SPP is either:

1. YES - if you want more KAR, take up the SPP providing that $5.10 is cheaper than buying on market (remember to factor in that there is no brokerage on a SPP).

2. NO - if you don't want more KAR, and you don't want any hassles, then do not take up the SPP.

3. MAYBE - is there an opportunity to make some money for jam,? i.e. is the price differential between the SPP and the market worth the effort for a simultaneous buy/sell?

I think options 1 & 2 above are pretty easy to understand (even the inspector should be able to understand them! lol), but option 3 is a bit trickier... at the moment, KAR is $5.21 bid in the street, so the arbitrage is $0.11 - on 2491 shares that is a positive difference of $323.51. If you can sell 2491 for $200.00 brokerage, you can collect $153.51 for a wee bit of work. If you pay less brokerage, you make more...

with this SPP I'll sit on the fence until Monday, and then make my decision - last SPP I arbitraged it and collected a bundle of free cash - thank you KAR!

p.s. these three options apply to any SPP - i.e. the BRU SPP was a money for jam arbitrage opportunity (which incidentally is closing up as we speak)