In this article, I describe my experience trying to arbitrage EDP shares. This morning, I read my newspaper, Valor Econômico , and woke up with the following news written by Felipe Laurence: "EDP Portugal will launch an offer to close the capital of EDP Brasil and will pay R$ 24 per common share".
As I had been following EDP shares , I knew that the share was being traded at R$19.63 and I thought: "Why not try arbitrage right at the opening of the market , trying to buy it close to R$20 and resell it?" there at some point after R$24?" I was hoping with my fingers that the other investors were also more poorly informed than I was.
What happens is that yesterday, the ENBR3 share was quoted at R$ 19.63 and, if everything went well and all the bureaucratic procedures were approved within the CVM , the investor would possibly receive R$ 24 per EDP share. So, it would work something like this: we would possibly receive BRL 24 and pay something close to BRL 19.63. The arbitrage logic would be this, and we would be earning 22% if everything went well, just as Laurence had pointed out in his article in Valor Econômico.
However, what happened was that this morning, when I tried to enter the pre-opening session, the prices had already burst, above R$23. In addition, I had the extra difficulty of the opening "delay". When the stock went into trading, it was around 10:17 in the morning. At that moment, we already had a price very close to R$24 and, shortly thereafter, falling back to levels of R$23.
Therefore, we have the following scenario: we would pay R$ 23 for something that we might receive R$ 24 at some point in the future. As this is not yet a confirmed fact and there is a whole process that will be judged by the CVM and that may take time to be carried out or not even be consolidated in fact, entering R$ 23 to possibly obtain R$ 24 would be imprudent and a risk unnecessary.
Unfortunately for me, my arbitrage attempt didn't work out! But what I want to draw your attention to is the following: browsing the EDP Brasil website, we can see that, on 02/28, we already had the news of the takeover bid (OPA) in the relevant facts of the company. Unfortunately, this news didn't grab my attention and I wasted my opportunity to get ahead of the market. In the document released confidentially, we found that there was indeed a public offering of EDP shares. It wasn't this time, I slept on the bus stop and didn't pay attention to the triggering event. But life as an investor is just like that, we must always be looking for an opportunity, with the certainty that at one time or another we will find something valuable that was neglected by the market.