Why would you own NBG shares when, for a 40% discount, you can write NBG Dec 18th $1 put options for $0.90 and buy Dec 18th $1 call options for $0.01? It's the same thing--in 22 days you would once again have your exact same position in NBG...except you would have saved 40% of your money.
You can sell your shares and sell the Jan $1 put options for $0.90 each then you would be better off. If the price stays at $0.19, you almost double your money. Why would or wouldn't you do that instead of owning the ADR's?
Absolutely correct. The reverse split will make no difference. The options and the stock are sharply mispriced. The January $1 put options are literally $0.90x$0.92. The calls $0.01x$0.02. The stock is $0.186.
The issue is that most investors can't seem to figure out what's happening. Those investors probably won't be able to figure out how to better their position with options.
The Jan $1 call options are $0.01x$0.03 and the Jan $1 put options are $0.90x$0.98. Sell your stock and create an equivalent position by selling the put options for $0.90 and buying the calls for $0.03. You will pay only $0.13/share for NBG.
For those people who are thinking about arbitraging this dislocation and making a free 56%, don't bother. There are no NBG shares to short--I know because I've been trying.
Last time the HFSF took a majority equity stake in NBG. If that does happen, my guess is that there will be an additional three billion euros at the post-reverse-split price of 0.30 euros. If that's the case, there would be an additional 10B shares of NBG/ETE after the reverse split.
They announced 1 billion new shares (post reverse split) for the upcoming offer which is 15 billion shares pre-reverse-split. However there are still the shares which went into the 1,166,000,000 euro offering from the debt conversion "waterfall." It looks like the debt conversion was 691 million euros and it sounds like that converts at exactly 0.02 euros. If not 0.02 then it at least very close to 0.02 since the senior debt was the bulk of the conversion and converted at 100%.
There should be around 5 billion shares after the 1-for-15 reverse split as the filings suggest. Does anyone have a different interpretation?
Well, it was interesting.
NBG Jan $1 calls are $0.01 to $0.03 and Jan $1 puts are $0.86 to $0.92. Even with the spread you can buy the call, sell the put and have a synthetic position in NBG for only $0.17. Or you can just follow the herd and pay the going rate of $0.28/share (in the after market).
What that disparity in price means is that options traders think NBG investors are loopy. Additionally, investors in Greece think NBG investors are loopy since today they sold it down to 16 euro cents, hitting the curb. Nobody thinks NBG investors are smart at this point except the NBG investors themselves.
Unfortunately it's not possible to arbitrage this huge price difference between the stock and the options because you can't get NBG shares to short (I've tried). All you can do is watch investors lose their money and watch them slowly figure it out.
If you have a lot of money in NBG, sit back and think about what's going on rather than just piling into the stock. You may get burned.
The reverse split hasn't happened yet. So far there has only been 1.166B euros worth of shares issued at 0.02 euros (around 55B new shares). There will be an additional 300M euros raised but 75% of that 300M will be convertible notes (which NBG expects to buy back) and 25% of that will be additional new shares.
No way...I was only able to get a borrow for a measly 200 shares. There are virtually no shares available to short. How were you able to short that many shares??
NBG trades 3,000 times below book value?? Where did you get that misinformation?? With 1,466B euros worth of dilution, mostly at $0.02, there is/will be an extra 60B shares and the stock price is actually six times ABOVE book.
In Greece, the bank dropped and hit the 30% trading curb two days in a row and was last at 0.16 euros. NBG somehow found some optimism among traders in the United States.
It's virtually impossible to short these shares. I've had an order in from early this morning but there are no shares available to short.
Yes, Mr. Shkreli did. The 500,169 shares he just purchased at $0.61/share (about $300k) are now worth $20M.
Exactly...and on top of that, 30% is the trading curb in Athens which NBG hit right at the open in Athens.
$0.335. Literally double the price in Athens. Athens hit 0.16 euro cents right at the open before triggering the 30% daily downside limit. Athens thinks NBG is overpriced at 0.16 euro cents and the US is gobbling up shares at $0.33. This isn't going to end well for NBG investors in the US.
That seems to be the gist.
Shkreli bought a ton of shares at $0.66 then kept buying on the way up. It doesn't seem like he was interested in getting a good deal...it seems like his goal was to pump the stock. The equity financing announced yesterday will certainly be immediately sold as well--they're going to make a lot of money off of day traders.
The bubble has to pop at some point. Just wondering if it will double again before it pops.
The news about new equity financing is a step in the right direction--I'm sure the new financing isn't going to be at $35.
There really aren't any shares to short. I was only able to get 200 shares to short.
I don't know how many shares are available to buy long, but I'm guessing the float is effectively 500k to 1M shares. That would explain the rise from $1.75 to $35 in three days.