Shareholders approve Tesla Solarcity acquisition
I found a cool risk arbitrage play here that others may find interesting.<p>When the deal was announced, it mentioned that SCTY shares were to be converted into TSLA shares at a rate of 0.11 TSLA/SCTY. Yet SCTY shares were priced at close to 0.097 TSLA/SCTY.<p>This means there was roughly a 12% profit to be made by buying SCTY shares and shorting the equivalent value of TSLA shares, assuming the deal goes through.<p>I ended up only buying SCTY shares, effectively buying TSLA shares at $182 (when it was at $203). Now TSLA is at $189 so I only made about 4% but had I shorted TSLA at the same time I would have made the full 12%.<p>All over the course of a just a few months, not bad. It seemed pretty obvious to me that the deal would go through - though hindsight is 20-20.<p>It's also interesting to consider that now that SCTY has little downside risk and 20% of SCTY shares are held short, if there will be a short squeeze. Seems like SCTY shares are locked at exactly 0.11 * TSLA so I guess I don't see this happening.<p>Fun, profitable learning experience. :)