Event Driven Trade - Merger & Acquisition Arbitrage

Throughout the years journaling my investment journey in Stockbit, I often get the most comments / DMs / PMs / engagements from friends in the platform whom had learned a thing or two, or celebrating together successful closure of an event driven trade. These deals were often lower risk in nature, whilst having a pretty decent absolute return and even more so on per annum basis, perhaps due to the inefficiency of the market.

Some past low risk event-driven trade ideas and threads of the past:

1) $SPB / 1783 (SELANGOR PROPERTIES BERHAD) SELANGOR PROPERTIES BERHAD, Nov 2018. 17% absolute return within months. Link: https://cutt.ly/AGZ1feq

2) $TAGB / 5158 (TA GLOBAL BERHAD) TA GLOBAL BERHAD, June 2020. 22% absolute return within months. Link: https://cutt.ly/1GZ1fbR

3) $BIMB / 5258 (BIMB HOLDINGS BERHAD) WA, Dec 2020. 24% absolute return within months. Link: https://bit.ly/3saXHOo

4) $IJMPLNT / 2216 (IJM PLANTATIONS BERHAD) and $MMCCORP / 2194 (MMC CORPORATION BERHAD), June 2021. 5% and up to 25% absolute return within months. Link: https://bit.ly/3sbYH51

5) RAZER INC (1337 HK), Feb 2022, 15% absolute return within months. Link: https://bit.ly/3sbLGIM

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Anyhow... Warren Buffett addressed this in a very layman manner in his recent Berkshire AGM, when he touched on his Activision Blizzard shares ownership - of which BRK now owns 9.5%. I often wonder whether my posts on this topic is / was understood by many, so here's uncle Warren's explanation on "work outs aka arbitrage"

https://bit.ly/3w3teTM

- BRK fund managers bought 15m shares of activision in 2021

- In mid Jan, Microsoft to acquire Activision at USD 95 per share

- Buffett then said that Activision "become a different kind of security... an arbitrage."

- Buffett the continues that an arbitrage is a "stock whose value depends not on what the market price does but whether a given announced corp event occurs."

- Buffett then purchase Activision HIMSELF for this arbitrage event. He mentioned that in an arbitrage, you should "spend alot of time on analysis of announced deal going through"... and that "has to bet big as profit is limited" whils also warning that "the deal may blows up and who knows what happen".

Do take a listen! In current volatile market, low risk event driven trades are worth pursuing!