proceed with the deal at the original offer price at $54.20 a share on Tuesday, the social media company’s stock rallied as much as 23%, pushing the spread to its narrowest level since the pair entered a merger pact back in April.
Arbitrage traders make money by betting on mergers agreements, with the potential for millions of dollars in profits if the deals go through. Now, all that’s left is to wait for the agreement to close. The veteran investor purchased the stake under the belief that Musk wouldn’t be able to get out of the deal, and the assumption that the value of the stock was in the range of roughly the mid-$30s a share, making the downside risk if Musk won the trial minimal, they added.
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