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My question is why do people bid up the price so much after the announcement? What's the benefit to a person if they bought some shares yesterday or today at the high prices?

The benefit for the buyers of shares is the risk premium that is associated in this type of deal. The current stock price of TREE in which the current USAI stock price is tied to(conversion rate 0,6123?something), is in fact lower than the price that shareholders get in the actual conversion date.

The risk premium comes from the spread between current price & conversion price. Otherwise one could just buy USAI stock and be done with it.

Happy42 (I hope I made any sense)
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