Alby asked: Today it appears that Intel is buying Mcafee for $48.00/sh. The market has run up Mcafee’s stock to $47.60/sh until the deal is approved by shareholders. Does it make sense to leverage that deal by arbitraging the deal?
What I mean, is should I buy Mcafee stock @ $47.60/sh and sit on it, so I can collect a free profit of $0.40/cents a share? I calculated that if I put up $200,000 and used 20x margin on that deal, I could put $4,000,000 down, get 84,033/sh of Mcafee. When the deal closes at $48.00/sh, I’d walk way with $33,613 of profit. Not a bad chunk of change for doing absolutely nothing. Right?