"looks political to me."
Why does it look "political" to you?
"evidently, the market does not think so, as per the increase of INTC share price "
The "market" absolutely thinks the combination at the expected $54 per share is BETTER than the value of Intel without ALTR. That is why the Intel share price is rising.
IF the market thought that Intel was paying too much for ALTR, the value of INTC would be diluted and the INTC share price would FALL because shares would have less value.
"[Ash makes the argument that the yields on non-Intel FinFETS aren't as good as we are being told. Say it ain't so! LOL]"
Additionally, "Ash" means "Ashraf Eassa" who writes "technical" articles for Motley Fool, Seeking Alpha and other $50+click publications.
Ashraf Eassa Articles
Intel Corp signed a standstill agreement earlier this year with Altera Corp that expires on June 1, giving the world's largest chipmaker the option to launch a hostile bid after that, according to sources familiar with the matter.
The agreement, disclosed to Reuters by the sources this week, explains why Intel has refrained from launching a tender offer for Altera's shares once their negotiations broke down. It also underscores the risk Altera faces of such a hostile bid.
Earlier this month, Altera rejected an unsolicited $54 per share offer from Intel following months of negotiations, the sources said, asking not to be identified discussing confidential information. They said Altera agreed to engage in these talks on the basis that Intel would not go public with any offer until June.
In February, Intel discussed offering $58 per share for Altera, based on publicly available information it reviewed at the time, according to the people. After signing a non-disclosure agreement and combing through non-public information, including the company's outlook, it ended up revising down its offer, they said. Last week, Altera posted a sequential 9 percent decline in revenue for the first quarter and said it also expects weakness in its second-quarter guidance, particularly around its wireless business.
"According to IHS, the cost of the "
Do you have any idea how IHS determines their estimates and how close they are to being accurate?
An analysis of Sharyl Attkisson's assumptions and math she made when she wrote her article. Interesting reading.
Sharyl Attkisson botches her math again but still may be onto a real story
"And that's why they can ..;."
By George, he's got it! ... 8-)
What you are now coming to understand is why smile every time I see someone post "Boy, shorty is going to get reamed!!" ... or "The market is doing X but this junk stock is doing nothin'"
The VERY predictable nature of Intel announcements of dividends and events lowers the volatility even more.
That is one big reason I sell PUT options ~100 days out after a multiday sell off and then harvest a $1 off the bounce and close them. If I am wrong and it keeps going down, I just roll them out and pocket the CREDIT.
2009 Junior subordinated convertible debentures due 2039 at 3.25% 1,088 1,075
2005 Junior subordinated convertible debentures due 2035 at 2.95% 960 946
FROM INTC 2014 ANNUAL10K PAGE 30 near page bottom
During Q4 2014 , the closing stock price conversion right condition of the 2009 debentures was met and the debentures will be convertible at the option of the holders during Q1 2015 .
AND.... every dividend beyond $0.14 and $0.10, Intel creates more shares by lower the conversion price by the overage.
FROM INTC 2014 ANNUAL10K PAGE 90 near page bottom
The conversion rate adjusts for certain events outlined in the indentures governing the 2009 and 2005 debentures, such as quarterly dividend distributions in excess of $0.14 and $0.10 per share for the 2009 and 2005 debentures
"The option makers are going to screw around with Intel and there's nothing anyone can do."
I think the option market maker may be a victim. I might be wrong. I think that there are others pulling the strings. During the first week in November 2011, the number of FAILS TO DELIVER shares in Intel jumped from 10's of thousands to 11,000,000 shares in 1 day. The day before ex-dividend, the very deep JAN calls traded 600,000 in two different strikes. I think they exercised call options early to capture some shares across the ex-dividend day.
Many times the option trading is VERY heavy the day before ex-dividend. At the close,
the stock trades without dividend
The put has more value
the call has less value
IMO, someone backs the option market maker into a corner.
If you want your head to spin, Google "Intel Reverse Convertible Notes " and read about the financial instruments that Barclay's issued against Intel performance. They are even crazier .... a "convertible bond" but more like "put" than a normal convertible which is like a "call" option.
The current state of the debt is reported every quarter in the 10Q as one of the Notes. Search down for "Convertible Debentures" ... most of it is readable.
after checking again .... I think they are callable in 2019.
"On or after August 5, 2019, we can redeem, for cash, all or part of the 2009 debentures for the principal amount, plus any accrued and unpaid interest, if the closing price of Intel common stock has been at least 150% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading-day period prior to the date on which we provide notice of redemption. We can redeem, for cash, all or part of the 2005 debentures for the principal amount, plus any accrued and unpaid interest, if the closing price of Intel common stock has been at least 130% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading-day period prior to the date on which we provide notice of redemption. If certain events occur in the future, the indentures governing the 2009 and 2005 debentures provide that each holder of the debentures can, for a pre-defined period of time, require us to repurchase the holder’s debentures for the principal amount plus any accrued and unpaid interest. Both the 2009 and 2005 debentures are subordinated in right of payment to any existing and future senior debt and to the other "
"The conversion prices have been exceeded. So haven't these bonds been converted to stock as per your numbers?"
Actual conversion happens when the bond matures in 2035 and 2039. When the stock price exceeds the conversion price AND the EFFECTIVE bond yield exceeds the dividend yield in 2005 and/or 2009, the bonds are candidates to be used as collateral against a short position. The bond and short neutralize each other, there is fixed, 100% guaranteed income AND the investor can redeploy their cash again.
Few would short when Intel was AT the conversion price.
More would short as the delta above the conversion price became larger, to lock in profits and income .... risk free.
Junior subordinated convertible debentures due 2035 at 2.95%
2009 Junior subordinated convertible debentures due 2039 at 3.25%
When Intel sold their convertible bonds in 2005 and 2009, they created a group of short sellers who bought and own these bonds. Hedge funds have large holdings of these convertible bonds and can short and cover against the conversion without worry. That leads to arbitraging and narrow price movements.
Intel sold $1.6B and $2.0B of convertible bonds in 2005 and 2009. The original conversion prices were dividend increase protected. Every time Intel raised the dividend, the excess dividend reduced the conversion price.
The initial rates were 2.95% and 3.25% but with the extra dividend, their effective interest rate is now 6.45% and 7.20%.
January 1, the conversion prices were down to
$2.0B of $21.71 per share = 92.1 million shares today
$1.6B of $28.61 per share = 55.9 million shares today
148.0 million shares total today from the two bond offerings
Do you think the analyst calculated an expected 70% from the recent Samsung 14nm price drop or from an unnamed source? Samsung has declined to comment on yields. How believable do you think the number is?
“TSMC's monopoly on leading edge has been broken thanks to Samsung's successful ramp of 14nm with current yields exceeding 70%,” said Mehdi Hosseini, an analyst with Susquehanna International Group. “Samsung has effectively become as good as TSMC at 14nm while offering a much lower ASP per wafer.”
A favorite center price point of the narrow trading range seems to be at the OPTION STRIKE + DIVIDEND. These narrow trading ranges become more apparent as we approach the ex-dividend date (next one ... May 5th).
Today, that is $32.00 + $0.24.
Cowen and company raised a couple of good points about the ASML contract to a US company.
1. EUV was targeted at 7nm but ASML had good results
2. Strong dollar combined with weak Euro makes for a strong currency discount on the equipment ... The Euro has dropped from $1.40 to $1.07 over past year. ... 1/3
"A covered put is a sell of puts against short shares. "
I was also thinking of a "cash covered" put which is also a "covered put" but your definition seems to be the one defined.
The open interest did not seem to change. according to my screen this morning.
" they sold for 9 dollars "
Hmmmm. I do think that it was a SHORT PUT(covered or naked) which is a "BET" on a price FLAT or UP.
If this was the mate for the 4,000 contract pair also last week, they could have closed the position recently opened. There are also a number of ways to 100% hedge what appears to be some sort of option STRADDLE.
DIVIDEND ARBITRAGE? .... The option expiration day of mid May is beyond the EX-DIVIDEND date of the first week in May. The dividend drop pricing is currently tilting toward the puts.
It did not appear to be a simple "BUY TO OPEN" put trade though .... IMO.
There were 4000 $40 May 15th put contracts traded.
There were 4000 $40 May 15th CALL contracts traded, also.
This is also the SECOND PAIR of 4,000 contract May 15th $40 trade. One was about a week ago.
They are linked.
The BID/ASK spread on the PUT options is very wide at about 80 cents: BID/ASK $7.20/$8.00
The "LAST" price was $9.02 for the PUTS which is likely what ALL the puts traded at.
The "LAST" price was $0.02 for the CALLS which is likely what all the calls traded at.
NOTICE: that the difference between the CALL and PUT contracts is $9.00 exactly.
DID they BUY the puts and SELL the CALLS?
DID they SELL the puts and BUY the CALLS?
Why? Please explain. 8-)