Forum Archive Index - April 2004

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi Shayne,

>
> Just a quick question about the offer made by Norgate for 50% of 
> WRI.
> If the offer was 1.50, and the current price of WRI shares are 1.39
> then isnt there a small profit to be made here?
> 

Short answer: Yes.

Longer answer.   The offer is conditional so it may not go through.   It 
is not clear if you will be able to sell *all* your shares for $1.50.   That 
means the profit you make on half your shares might be offset by the 
loss on the other half of your shares that Norgate doesn't want to buy, 
as the price slumps back towards $1.20 (in the short term).

If the offer doesn't go through at all your entire investment might slump 
back towards $1.20 , (at least in the short term).

What the market is telling you is that there is a risk this offer will not 
get up and run after all.  That's why the market price is discounted to 
the offer price.

SNOOPY



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