In September 2017, word leaked that cellular service provider T-Mobile had offered to buy rival Sprint for $6.71 per share.
Today, Sprint trades around $6.10 per share while both sides continue to work on the deal.
But those who invest in Sprint today could get a guaranteed 10% profit whenever the deal closes. That’s because T-Mobile has already agreed to buy the shares at the previously mentioned $6.71 per share—60 cents more than where it trades now.
Wall Street calls these money-making opportunities “merger arbitrage” plays. At PBRG, we call these “Skim Trades.”