will notice and explore such matters, and in the process, punch a wormhole between the universe of legacy NMS and new universe of a blockchain capital market.
According to this view, if the Argentine public abandoned its peso holdings, the peso would depreciate, and arbitrageurs
would step in to support the now-undervalued currency.
In the latter case, the arbitrage violations persist due to "limits to arbitrage" such as the inability of arbitrageurs
to raise capital quickly and/or their unwillingness to take large positions in these arbitrage trades because of mark-to-market risk.
Finally, the company's portfolio manager, Gabelli Funds LLC highlights the rising rate environment and states that this implies higher returns on mergers as spreads widen to compensate arbitrageurs
. In addition, the portfolio manager views this as an ongoing opportunity for returns and opportunities to grow wealth potentially.
Yet the fundamental critique of appraisal arbitrage focuses not necessarily on the costs it imposes or the judicial resources it consumes, but rather on the misalignment between the strategy as currendy utilized and the historic purpose of the remedy--providing liquidity for shareholders who, without a veto right, are forced to receive an "illiquid instrument." (14) Indeed, appraisal arbitrageurs
typically purchase their shares after the announcement of a merger, choosing to buy into the transaction rather than looking for an escape hatch out.
This means merger arbitrageurs
, the proverbial Wall Street arbs, will accumulate Time Warner shares, but the wide deal spread exists because even the Street's top arbs do not have the capital to harpoon a $74 billion megacap media whale.
First, the ever present information cost and risk (e.g., the absence of same assets) to arbitrageurs
do not make arbitraging a riskless endeavor.
It perpetuates the illusion that somebody else is paying, while managed-care stockholders, administrators, arbitrageurs
, and purveyors of ridiculously overpriced drugs or procedures rake in profits.
The other form of arbitrage is done by market participants (arbitrageurs
prevent appraisal arbitrageurs
from having the option to wait and then
De Long, Shleifer, Summers, and Waldman (1990a) assert that the unpredictability of noise traders' philosophy is the reason for increased risk in the asset prices which simultaneously influences the deterrence of rational arbitrageurs
. Consequently, the risk-averse arbitrageurs
do not take positions to exploit the arbitrage opportunities.