I am looking at Saizen REIT situation after they have announced that someone is buying over all their properties earlier last year. The price that they are paying is equivalent to $1.17 per share and the deal will close within the first quarter.
Looking at the trading price now at $1.09, we are staring at a potential gain of 8 cents within three months. If I invest 10,000 shares, I will earn $800. This is on the assumption that the deal will go through. If it does not go through, the price will drop to about $0.93 which is the price before the announcement, which means potential loss of 16 cents. If I invest 10,000 shares, I will lose $1,600.
Therefore, which side are you on? I am quite confident that the deal will go through and the managers agreed to it even though it means they lose their jobs. And I just bought another 10,000 shares at $1.09 per share so that potentially I can profit $800 from it.
It looks like a gamble, but I calculated the risk and I am able to handle it. So I went ahead.