Comments on: Why Investing In “Sure Thing” Buyouts Is Risky http://www.bargaineering.com/articles/why-investing-in-sure-thing-buyouts-is-risky.html personal finance blog with anecdotes, advice and commentary. Sun, 22 Nov 2009 06:04:27 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: Adfecto http://www.bargaineering.com/articles/why-investing-in-sure-thing-buyouts-is-risky.html/comment-page-1#comment-224757 Adfecto Tue, 18 Mar 2008 21:18:30 +0000 http://www.bargaineering.com/articles/why-investing-in-sure-thing-buyouts-is-risky.html#comment-224757 Buyout situations like this are very rarely worth the transaction costs to pay the game. There are professional Wall Street bankers that spend their whole day doing nothing but analyzing buyouts. This technique even has a special name called "merger arbitrage" with funds and bankers that specialize in it. Leave this game to the big guys because I promise you they have already squeezed the deal for all the profit well before you put your money in the ring. I don't believe in a perfectly efficient market but in these deals the big players have almost always priced in all available information and that leaves you with nothing more than coin flip odds to get it right and very little return for your risk. Buyout situations like this are very rarely worth the transaction costs to pay the game. There are professional Wall Street bankers that spend their whole day doing nothing but analyzing buyouts. This technique even has a special name called “merger arbitrage” with funds and bankers that specialize in it.

Leave this game to the big guys because I promise you they have already squeezed the deal for all the profit well before you put your money in the ring. I don’t believe in a perfectly efficient market but in these deals the big players have almost always priced in all available information and that leaves you with nothing more than coin flip odds to get it right and very little return for your risk.

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