Greater fools at play

When the relentlessly efficient market casts a vote, it's usually right. And if it's wrong, it's usually not wrong by much. However, investors' belief that Roche would not exercise its option to acquire the rest of Genentech showed that the market isn't infallible.

GNE's valuation using the $82.50 call price is $10.6 billion. However, by bidding the stock up $4 dollars over the call to $86.50, the market had valued the biotech company at $11.1 billion, a $510 million difference...