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Deal Update: MSFT-YHOO

Nevermind. (Sorry, couldn’t resist.)

Black Swans and Pictures

An article this weekend at discussed Value at Risk, and touched on some of the same issues I mentioned in an earlier post regarding normal distributions and “black swans.” As investors we put a lot of weight on the bell curve, perhaps too much weight, and certainly more than we realise. Our investment and […]

Deal Update: MSFT-YHOO

It has been nearly a month since our last update. Marc Andreesen has a nice post discussing possible directions the deal might take now that Microsoft’s latest threat was ignored by Yahoo. So, as of April 28th, here are the numbers: MSFT Price: $28.99 YHOO Price: $26.43 Arbitrage Spread: $2.85 Spread Discount: 9.7% Here’s the […]

In Search of Black Swans: A Statistical Look at S&P 500 Weekly Returns

It’s useful to perform a basic statistical analysis of stocks and indexes to confirm the underlying bases for some of the assumptions we make in our never-ending search for the Holy Grail. In this post, I’ll examine the weekly price returns for the S&P 500 for the last ten years (April 13, 1998 – April […]

Deal Update: MSFT-YHOO

I know this looks like “All MSFT/YHOO, all the time,” but, hey, it’s current. Microsoft turned up the heat a bit yesterday by threatening to go hostile and lower its bid for Yahoo. YHOO promptly responded that it didn’t like the “old” offer and it certainly had no interest in a “new” lower offer. What […]

One of These Things is Not Like the Others

The S&P 500 was down 0.19% on April 2, but as shown in the chart below, SPY was actually up 0.07%. Likewise, the DJIA was down 0.36%, but DIA was up 0.10%. This is a clear example of the tracking error between an ETF and its benchmark index. However, note that in this case several […]

What a Difference a Day Makes

Wow! It was a good day at the office. I’ve created an ETF dashboard borrowing heavily for the format from the folks at Bespoke Investment Research. Below are the performance dashboards of selected ETFs for April 1 and March 31. What a difference a day makes. A few highlights: 1. The ETFs tracking major US […]

Microsoft-Yahoo Deal Update

With Microsoft indicating it is in no hurry to bid against itself by raising its bid for Yahoo, let’s take a quick look at where things stand today. The following chart shows the value of the arbitrage spread from February 1, 2008, when the offer was made, through March 31: We can see that, once […]

SPACs — The Next Big Fad?

The tagline and first two paragraphs of this WSJ article (subscription required) raise all kinds of red flags: Goldman Writes Out ‘Blank Check’ IPO Plan Promises A New SPAC Era; Lending Legitimacy By LYNN COWAN March 26, 2008 Goldman Sachs Group Inc. filed plans for its first “blank check” IPO, outlining a deal that will […]

Meanwhile, Back at That Other Deal…

So, the market spoke and JPMorgan listened, right? Well, sort of. Here are the details of the original JPM offer for Bear Stearns: Buyer: JPM (and, indirectly, the Fed) Target: BSC Terms per share: .05473 shares of JPM stock for each BSC share Merged value of original terms: $2.00 per BSC share And, here’s what […]