125
At $10.05 per CGC share, $10,000 would purchase 995 shares (same # of shares had MT been bought instead at $7.17). CGC’s share price fell to $9.78 midday on Dec 6. Does that mean the investor should have waited to buy CGC directly at $9.78? That logic is exactly how some use forums to manipulate Retail Investors. That table and argument is persuasive but is really “noise” and exactly the incomplete information that some use to nudge Retail Investors to change doors because the share price of MT ($6.40) when CGC was at $9.78 is missing from the entire discussion.
Existing shareholders of CGC – should they sell CGC for MT? Assuming the deal closes as stated, this is literally swapping shares in CGC for shares in CGC. On December 1, the share prices of CGC and MT were $12.35 and $7.45 at approximately 12:30pm. At those prices, one CGC share could be sold and 1.66 shares of MT purchased. The MT shares would be converted back when the deal closes to 1.18 shares of CGC – an 18% increase in their shares of CGC. Selling shares of CGC that would not otherwise have been sold puts further downward pressure on the share price while simultaneously increasing the demand for shares in MT. Investors and Traders alike were and are watching the prices of these two stocks very closely and executing profitable trades or timing optimal points to sell CGC shares to buy MT shares. The following table depicts the share prices of CGC and MT from November 30 to Dec 6.