Stupid stock question |

Posted byMessage
Jennings, LA
Member since Jan 2010
5917 posts

Stupid stock question

Directv agreed to sell to AT&T for between $96/100 a share and right now it's trading at $82.

Why doesn't everyone load up on directv at $82 because when the FCC approves it won't it go to $96/100 or am I off?

What am I missing?

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Auburn Fan
Member since Jun 2009
5076 posts

re: Stupid stock question

Market doesn't believe the deal gets done for 96 a share or that the deal has a decent chance of falling apart.

There is still lots that could happen between now and then.

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Clemson Fan
The Welsh red light district
Member since Jul 2008
17208 posts

re: Stupid stock question

There is an entire hedge fund subsector that does nothing but that (merger arb).

The risk is that if the deal falls through, Directv stock will go into free fall.

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Member since Jul 2009
2038 posts

re: Stupid stock question

Approval, if/when it comes, is a while off.

I think future approval of the sale, as currently written, is too unsure, to reflect in the stock price.

If the deal gets approval, I think it will be with some conditions, which will lower the offer price.

If the deal does not get approval, DTV could collapse. Anyone it could then merge with would be a significantly smaller player, or someone not in competition with them currently.

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