Roy, I had those same options expire too. I got 25 cents. The funny this is I sold them when IMOS was around $17.50. June options too. Today IMOS is close to $18 and the bid is only 15 cents for the July 20s. Do the market makers read Yahoo stock boards? Seriously, this may the first month where I won't sell options in quite a while because the bid is too low in my opinion. Plus, I won't buy back the stock that was just called away unless it falls below $17.50 again. Hmm...maybe this is the beginning of the end of using a covered call strategy. Nice while it lasted...
qksha, I've been doing the same myself over the same amount of time. I dare say IMOS options have provided a great return thanks to management's continued lack of value creation. Ytd I've made about $2.50/share in options income. Last month I sold the May 17.5 for 0.78 because the closing price at April's expiration was the same as the strike price. :-) If the stock price falls below $17.50, which it always seems to do, I buy in again. About half my holdings are sold at the 17.5 strike with the other half at the 20 strike but two months out. I hold about 25% of what I used to have in IMOS. The spreads are often wide, though not always, and I usually shoot for just below the mid-point range and usually get it. On one hand there's strong downside support due to the conversion. On the other we've got a company that does little to enhance the stock's value. The result: a tight trading range. For me this has been covered call heaven. However, someday IMOS will break through $20 again. I hope it does. I got lucky and have been able to milk the option cow only because SJ and company continue to disappoint.
34.90 x .9355 = 32.65/32.84 =.9942x20 = $19.88 + 3.71 = $23.59
(23.59-17)/23.59 = 27.9% discount
It is about a 28% discount at the current quote. I wrote 25%+ because I was estimating and too lazy too look at today's 8150 price and latest exchange rate.
Selling at a 25%+ discount to 8150! Where are the hedge funds? Maybe getting toasted by VRX.
Bought more yesterday and sold calls on them. IMOS heading for its 7th straight down day.
cocojones - I wasn't calling Caff out. We are effectively on the same side of the trade. I was challenging his rationale for being an uber bull in light of industry characteristics and management's propensity of disappointing shareholders. At one time this board used to be a raging bull session and regardless of my own views I like to see more balanced opinions. If I ever write, for example, that IMOS will climb to $50 this year based on abc, I hope someone challenges me as to why I'm not considering xyz.
For the record I'm not annoyed with anyone other than SJ, the BoD, et al. Even here it's in a broader sense because I've done OK with IMOS despite their lack of shareholder focus. Looking ahead, I can see IMOS grinding its way higher as the conversion date approaches and my strategy is to sell covered calls on some of my holdings.
Caff, a growth company is a company that's actually achieving a high level of growth. You may suggest it will become a growth company (and I think you may have a couple of years back as well) but a forecast is only a forecast. Management made a projection. How much is that worth? How much has it been worth before? By their own admission they can't even forecast one year out with any reasonable accuracy. Just look at the past four years. I grant you that Chipmos may enter a growth phase. Or not. Who knows? Maybe they grow the top line only 5% annualized over the next three years and once again fail to meet their aspirational goals. Honestly, I would be stunned if they grew revenues by the those numbers over the next three years given how much this industry oscillates. One bad quarter and say goodbye to those target figures. Your entitled to your opinion of course. However, don't you think it's a bit premature, and given their track record, slightly whimsical to accept what they are forecasting as something you can bank on?
I can't and won't speak for others but I'm in IMOS primarily for the arb gap.
I think it's mostly "happy talk" too. Anyone remember back in 2012 when Chippy was going to be a $1B (in sales) company by 2017? Well, let's review how that's worked out. 2012-2015 revenue: $661m, $649m, $696m, and $606m. I'm still waiting for $700m. Perhaps this time will be different. Just like Micron. Oops. OK, I guess the cyclical nature of the business hasn't been repealed. Nevertheless, even though each of the past five years has seen an industry pullback followed by declining share prices, I'm pretty sure the next three years will be smooth sailing. After all, there's no risk in China.
Yep, IMOS has been a great value story. At least for those investors who bought under $10. Those who didn't are underperforming the market, in some cases by a wide margin. Not a satisfactory ending to the value story, I suppose. But under the stewardship of our fine leadership team I'm sure the so-called growth story is solid and IMOS will be a homerun.
Closing price on 3/12/2012: $14.16
I just listened to the cc (either the recording is not that good or it's getting harder for me to understand SJ's English). The part about consulting the lawyers regarding a buyback is hysterical. Are these the same lawyers that said we had to wait 90 days back in 2011, then 60 days, then 30 days? Then last year they somehow discovered (read: were pressured into) what everyone already knew; that you don't have to wait 30 days. How can you list on an American exchange and not know this? Now they are currently researching whether another buyback is possible? Shouldn't they have known this a long time ago?
SJ: Hey guys. Um, the shareholders are getting restless again. Can we do a buyback of IMOS during the process?
Lawyers: Great question! It never occurred to us that the stock might go down. Give us months to research this instead of calling one of our investment bankers because they would get back to us within a week with the correct answer and that's way too early. And too correct.
This is, first and foremost, an arbitrage play. Whether 8150 moves higher post-merger is anybody's guess and will depend on industry conditions which nobody knows what will be. Forecasting three quarters out is pointless IMO, let alone three years. I've seen it done before many times and have concluded it only makes the gods laugh. Baupost has an awesome record but I think they got suckered into believing management was shareholder friendly too. Even if the stars align and the industry catches fire I'm still going to play the odds and sell covered calls up to the point of conversion. I'm not going to be a long-term holder anymore unless major changes occur because my confidence level in the current BoD/management is low and my record for picking companies that get bought out is 0 for 27.
Dane Capital sold out? A bit surprising since they came out with a bullish article in December. Don't blame them though.
Caff, perhaps you're right that business is picking up but we've seen that five or six years running after business declined. And after at least five inventory corrections and/or slumps in as many years I personally don't get excited anymore because visibility in this industry is so limited. I was never enamored by this highly cyclical industry but I was excited about the cash flow generation of ChipMos and the awesome potential IMOS had as an investment assuming management would take the necessary actions, and with the appropriate speed, to boost the stock price. Sales may be recovering but for how long? Another downturn is inevitable and recent history suggests we'll see something within the next twelve months. Perhaps another one or two quarter inventory correction. I expect IMOS to rise this year due to the merger (which eliminates the discount). However, I'm not counting on this same management to do great things post-merger even if they do favor 8150. If the stock gets to $23 I'll probably start selling calls again on my entire position. This stock reminds me of one of those NBA players who, after being drafted in the top five, is relegated to sitting on the bench because he couldn't live up to his potential. JMO.