Anybody here not taking up their full $15,000 allocation? I see a neat risk-arbitrage situation:
Today's low = $3.13 Foregone dividend = 6.3 cents Dividend is unfranked Stock = very liquid SPP shares allocated ~ 2 weeks' time
Assuming a 7 cent drop in share price to compensate for the stock trading 'ex', a further 5 cent drop in price (say) assuming a number of institutions will also be taking part in the same risk-arbitrage, and using today's low as a proxy 'cum divvy' price -
then - all things being equal - we could be looking at around a 10 cent theoretical gain, after costs. That translates to a 3% taxable gain in under a month, or a very neat 30%+ annualised pre-tax return. While there's no guarantee of making money in this case, the Law of Averages shows that if you do a similar risk-arbitrage often enough over an investing lifetime.....
MGR Price at posting:
$3.18 Sentiment: Hold Disclosure: Held
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