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Merger Arbitrage: How to Profit from Event-Driven Arbitrage Thomas Kirchner
Publisher: Wiley

2) Event-Driven 3) Directional In event-driven hedge funds, managers look for stocks trading at discounts due to unusual circumstances. Here's an example of merger arbitrage. Once or twice every decade, M&A markets go through a bust and returns of merger arbitrage and event-driven funds slip. Such circumstances can include merger arbitrage, distressed securities, and private placements. Genesco's management would be well advised to insist on a floor to ensure that the certain erosion of FINL's stock price resulting from inevitable arbitrage shorting of FINL will not destroy the value received by GCO's current shareholders. Genesco's (GCO) poor second quarter results triggered a panicked reaction from Finish Line (FINL), which is “evaluating its options regarding” the merger of the two firms. Let's say A merger arbitrageur might buy Circuit City shares, and short Blockbuster shares, hoping to profit from the eventual convergence of these values. However, IsoTis stands out because nobody opposes the merger with Integra. Predictably, in the current jittery market, . To a large extent, the pain of non-votes is self-inflicted.