Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

I investigate special situations, pairs, and index rebalancing trades in Korea.

Korea / Special Sits, Pairs, Index Rebalancing

Crucialtec Rights Offer: Possibly Easy Arb Target, Just on a Small Scale

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/9794" target="_blank" data-smartkarma-citation="entities:9794:1">Crucialtec (114120 KS)</a> subscription rights trade began today. Spread now stands at 2.83% as subscription rights are currently trading at ₩154. The shares are down nearly 7% today.</li>
<li>The situation is interesting. The price is down 22.85% since the preliminary pricing date. At a 25% discount to the current price, a '<em>potential</em>' spread stands at 15.27%. 5% further down will give a 20.47% potential spread.</li>
<li>This sparked a heavy short selling yesterday and the day before. This must be arb trades. Given the company's liquidity situation, cancellation risk seems small. This is a microcap stock. Borrow may not be as smooth. If borrow isn't an issue, I'd arb-trade on this now.</li>
</ul>



Crucialtec (114120 KS) subscription rights trade began today. Spread now stands at 2.83% as subscription rights are currently trading at ₩154. The shares are down nearly 7% today.
The situation is interesting. The price is down 22.85% since the preliminary pricing date. At a 25% discount to the current price, a 'potential' spread stands at 15.27%. 5% further down will give a 20.47% potential spread.
This sparked a heavy short selling yesterday and the day before. This must be arb trades. Given the company's liquidity situation, cancellation risk seems small. This is a microcap stock. Borrow may not be as smooth. If borrow isn't an issue, I'd arb-trade on this now.


Crucialtec Rights Offer: Arb Trading Status