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Netflix, Inc. (NFLX) Message Board

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  • wuj96001 wuj96001 Nov 4, 2012 10:11 PM Flag

    Real question for regulators? Do Call Options constitute ownership

    Why didn't the news state it clearly that the transaction was for options not the actually 10% of the company to the public instead of wording it as "10% worth of the stake"? That could be so misleading to the public! I believe if the wording was correct the outcome of the stock price would be totally different!

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    • First, I don't think it would have changed the outcome one bit. Second, the reason they reported it the way they did is because they all want to be first to report so they just look at the bottom line not at how it got there.

      The way the news is reported has nothing to do with the stock performance. You don't really think retail investors drive this stock do you? This is hedge fund vs hedge fund and the play Icahn made is designed to put the hurt on someone imo. He sat back and let some short funds sell him 10% worth of the company not just via short shares but via short calls! It is a massive #$%$ in the ars" move because any day Icahn can call in those shares and force the OMMs and the fools silly enough to sell him 10% of the company at todays price 15 months from now to take it hard. Just think, how is anyone going to deliver 10% of the company's shares? It is more like 13% of the float, they can't deliver the shares own by insiders. Carl bought them as options because he could, because that was the way the idiots let him get his hands on 10% of NFLX. Just think it over, think about how it works and what this really means and you will see Icahn has the short funds by the balls - they are already short 30% of the company's shares (40% of the float) and are now on the hook for another 10% of the company at a moment's notice anytime between now and 14 months from now. How many short sellers want to be in that position?

      But they got greedy, they got over aggressive, they believed their own #$%$ and instead of covering they got taken. Icahn saw this a mile away. The shorts are the marks now.

      • 3 Replies to trainwrecker1969
      • If I sell Icahn a call struck at $36.05, and buy from him a put struck at $36.05, then by the magic of put-call parity I have just sold him the stock forward at $36.05. If the stock ends up at $100, he buys the stock at $36.05. If it ends up at $1, he buys it at $36.05.3 I don’t care what the stock’s price does, I don’t care what its volatility does, and I don’t care what Carl Icahn does. He’s buying the stock from me at $36.05, and since I am a dealer I have hedged by buying the stock already. At say $59.18. So as long as he pays me at least $23.13 for the two options combined, I am indifferent to what happens.

        Sentiment: Strong Sell

      • Thanks for the reply! That definitely makes sense for him to do that for taking advantage of the shorts. So, you agree that he didn't actually think the NFLX was undervalued as he claimed? That just sounds like he was such a shady guy, definitely not Warren Buffet like!

        Though I still think if the press informed the public that it was options purchase would make an impact on the price. When I first saw the news I automatically #$%$umed it was 10% of the physical shares and he actually believed in the company and wanted to have a seat on the board to revamp the company and kick the CEO's #$%$ around! For weak shorts they'd cover it right after the news came out, but if I knew that was just options acquisition then I'd think he didn't actually want to own 10% of the company he just wanted to pump and dump the option for a quick profit, then I would stay with shorts.

      • lol

        the counter party is long puts with right to sell scam at what price? not disclosed in filings by criminal crook Carl Icahn on Put sell price?

        Sentiment: Strong Sell

 
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