On June 2, 2016, the First Marblehead Corporation (NYSE:FMD) entered into an agreement to be acquired by two companies controlled by John Carter Risley, a Canadian businessman with investments in fisheries, food supplements, and communications. Investors can buy into FMD now and make an annualized 17% return by the end of the summer.
Why? As always, it’s all about betting on the safest horses. In a diversified portfolio, M&A arbitrage holds the role of an investment which has the volatility of a bond, while offering the annualized return of a stock. Of course, that is assuming that the transaction does not get voted down by shareholders or blocked by regulators for say, antitrust concerns. Continue reading “Why I Just Bought First Marblehead’s Stock”