Addition Upside
• If a competitive bidding situation arises for SMI, we may see the price of SMI increase (and potentially WMI further decrease as it works to sweeten its bid)
• Example: lf Widge Factory (WF), comes in and bids $120 per share in cash for SMI. , we could see SMI increase up to $ 118 per share (or even higher as WMI may be expected to counter bid)and WMI stay at $ 50 per share. If we close the position, we would enjoy a profit of $ 23 per share on SMI or $2300 from our trade