Strategic Capital Management, LLC (A) Case Solution
Creative Computers lately sold about 20% of its Internet auction subsidiary company, Ubid, at $15 per share to the people. The first day of trading closed at $48, giving a $439 million market capitalization to Ubid. The parent's stock price didn't keep pace with that of its subsidiary company. At the ending of the first day as a public company of Ubid, Creative Computers' equity value was less than the value of its position in Ubid.Possession connection and the comparative costs between Creative Computers and Ubid propose a possible arbitrage opportunity. To assess how best to use this investment opportunity, the supervisor of the hedge fund, Elena King, must recognize both the risks and expected returns related to different long and short equity positions.
This is just an excerpt. This case is about FINANCE & ACCOUNTING
PUBLICATION DATE: August 13, 2001 PRODUCT #: 202024-PDF-ENG
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