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View Full Version : The stock market, share prices and Alitalia...


airship
16th Mar 2008, 15:41
We're told that our stock markets operate efficiently, news about individual companies comes in, gets digested, and is immediately reflected in the share prices...?

So is anything to be drawn from the BBC report (http://news.bbc.co.uk/2/hi/business/7299203.stm) today that: Troubled Italian carrier Alitalia has agreed to be bought by rival Air France for a cut-price 138m euros(106m:$215m) in a move to save the state airline...

Air France-KLM offered one share per 160 Alitalia shares, valuing Alitalia at a low-value 0.10 euros a share...

That is a 81% reduction on Alitalia's current share price....

Alitalia's public share price on the Friday 14th March market close was 0.53 so that's about right. What might be interesting is the 3-month graphic (http://www.borsaitaliana.it/bitApp/graph.bit?target=azioni&isin=IT0003918577&lang=en) illustrating the stock's price movements ever since the Italian government (of the day) gave its' approval to the Air France-KLM bid last December. When the stock price descended by about 1/3rd from 0.80 down to its' present level.

I realise that stock markets do not always operate perfectly, but is it entirely reasonable that they behave so imperfectly as in the case of Alitalia...?! Presumably, Alitalia shares will "prophetically" drop to the 0.10 level or thereabouts sometime after Monday's reopening.

I just wish I knew enough about short-selling or puts and calls to have been able to take advantage, had I known what was about to transpire in the first place of course...?! :suspect:

PS. Do I get any points for an aviation-related thread here...? ;)

airship
17th Mar 2008, 13:56
Replying to my own 1st post in my own new thread directly concerning an aviation subject on the world's premier aviation website...oh well?! :uhoh:

Latest news (http://www.borsaitaliana.it/bitApp/news.bit?target=NewsViewer&id=424057&isin=IT0003918577&lang=en) about Alitalia: The Alitalia stock closed Friday at EUR0.54 and was suspended from trading Monday due to excessive losses. Also: Air France-KLM has said it would wait for the formation of a new Italian government following mid-April elections before finalizing any Alitalia deal.

Did anyone make a killing? Is there any money to be made here, and how...?! I need to make about 25,000 with under 1,000 over the next 6 months (no sex please, I'm British)!