Recent transactions, part 2

On top of the position I established and unloaded, I also made some arbitrage trades:

• BRCD buying McData. MCDT holder will receive 0.75 share of BRCD that they hold in MCDT. The time that I made the pair trade, the spread was about $1, was about 18%. With the deal set to close end of Jan, that's more than 100% annualized return. There are some risks involved
  
  
  
  1. BRCD investors may not approve the deal (McData already voted yes). This is unlikely, as there is no objections form the BRCD investor community at this point
  2. FTC has some concern on BRCD having too much of market share after the merger. This is also not a very serious risk, but worth keeping an eye on
  
  
  At the present time, the spread has shrunk to less than $0.5. Indicating the perceived risk is lowered..


• I purchased 1000 share of EBHI @ $9.10. Eddie Bauer is in the process of being acquired by a private equity firm for $9.25/shr. There is virtually no risk involved in this deal and is set to close end of January. The annualized return for this trade is 20%.

I have established other positions as well. I am running out of time, and those position will be covered in the 3rd part of this series.