[devilsavocado]

You've described the basic merger arbitrage strategy. There are many hedge funds that exclusively do this type of stuff.

It's risky though. When a deal doesn't go through you can lose a lot more than 12%

[a13n]

Yeah I'm pretty risk tolerant, I went in willing to hold SCTY for the long haul even if the deal fell through.

[ericd]

It's not clear there would have been a long term to hold it for, their financials weren't exactly pretty, and given how heavily dependent they were on debt raises, a rising interest rate environment would have been tough on them...