81. Merger Arbitrage – an individual investor can access this investment strategy through mutual funds.

After mergers are announced but before the closing is certain, there is typically a small gap between the current share price of the target company and the announced price that the acquiring company will be paying.

These funds buy the stock of the company being acquired and take advantage of the small increase in the stock as the deal becomes more certain.

This investment typically has a low correlation with the overall stock and bond markets.

Merger arbitrage funds need to be careful to only invest in merger deals that are highly likely to be approved and completed.

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