The deal is for $65/share but Instacart is trading at $57. Why? Shouldn’t it be a lot closer to 65?
2) Regulatory reviews typically take 6 months to a year. There is an opportunity cost to holding shares over this time, your capital is tied up in shares, when you could instead use the money to buy US 10-year Treasuries that yield around 5%.
Assuming the deal closes at $65 in 12 months, the present value of these shares is $65 / (1 + 5%) = $61.90
Also, the market has consistently undervalued Instacart since they went public to begin with, so why stop now? (signed, a not-at-all-bitter former employee)