#RAZER Inc - It's a Pass! Another successful low risk, event-driven trade

In such uncertain, tough and volatile market, to be presented with an opportunity to make decent return with low risk is a real blessing.

Razer's scheme was approved at today’s court meeting. The headcount test risk was comfortably passed with 465 scheme shareholders voting for and just 16 against the scheme. As mentioned yesterday, perhaps the recent "bad market sentiment" and sell off in tech stocks contributed to the entire thing becoming a storm in a teacup but I'm not complaining!

The Grand Court hearing of the petition for the sanction of the scheme will be held on 6th May. The effective date is 11 thMay and the shares will be delisted from the exchange on 13th May. The cash payment date for the sceheme is on or before 20th May.

In summary, from the moment we covered this on 23rd Feb, when the spread was at 12%, to the completion date which takes 3 months, annualised return is in the 50% range. For people like @weiboy90 who got in at HKD2.35 on 7th March, this deal is a 20% absolute return in 2.5 months, annualised to almost 100% return!

As of today's close, spread had narrowed to 3.5%. Expect it to narrow further. As the deal is to be completed within 1 month, that's still a decent 36% annualised return vs whatever you can earn in FD.

Last year $MMCCORP / 2194 (MMC CORPORATION BERHAD) was a good low risk event driven m&a arbitrage trade, but that deal was done when market was quite favorable / bullish. The impact on RAZER deal feels greater (to me at least), as the market thus far had been extremely hard to navigate. Here's hoping to more opportunities such as this!

~
For those who missed out, here's a Recap of what happened (for case study purposes)...

1) 23rd Feb. Introduction of the low risk M&A arbitrage trade / deal. Spread at 12%. https://cutt.ly/jGzY5Js

2) 14th Mar. Pre conditions fulfilled. Stock was trading at cheap levels, closer to pre deal announcement price than to strike price due to market condition! Logitech result showed Razer's opportunity. Spread at 23%. https://cutt.ly/EGzY6pL

3) 24th Mar. Quarterly result announced. Showed Razer's potential and highlights its cash cow-ness. Share price rebounded, spread at 17%. https://cutt.ly/HGzY6c3

4) 30th Mar. Scheme document released. Court meeting to be held 26th April. Independent Financial Advisor says offer is fair and reasonable. Spread narrowed to 10%. https://cutt.ly/hGzY6UE

5) 26th Apr. Court meeting held. Deal approved with headcount test risk passed in flying colour. Spread is now 3.5%. Deal to complete by 20th May.

@ycng949 @weiboy90 @mengteck @zhexiangxd @Goldenhorse77