Thursday, April 16, 2020

Low Risk Arb Plays

I’ve started to get back in some low risk arb plays. I was recently in Cypress Semiconductors, which just closed today. Cypress Semiconductors received all regulatory approvals and there was still ~ 5% annualized return spread. Today, I picked up some Mellanox Technologies (Ticker: MLNX), which also received all regulatory approvals and is anticipated to close by April 27th. Again, with Mellanox Technologies you are looking at a ~7% annualized return with virtually no risk. These deals will close unless a giant asteroid come crashing down to earth and destroys everything. I like these near term deals as they provide attractive returns with the cash I have on the sidelines. Much better than the ~ 0.40% yield I’m currently receiving in my money market account.

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