Highest-Stakes Poker

When the price of Cities Service Co. stock tumbled last week, no one felt the pain more than the small band of risk arbitragers. These quintessential Wall Street risk takers buy shares in a firm soon after a takeover bid is announced, in the hope that they can resell the stock to the acquiring company at a much higher price when the deal is finally concluded. Risk arbitragers made estimated profits of about $200 million last year on Conoco stock when it was sold to Du Pont. Ivan F. Boesky, 45, is said to have made at least $40 million on...

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