max Pain is the price where the most people will lose on options and that is 120 for june 19th. Very very unlikely that it will differ from that price by more than 50 cents IMO
so is bbep but it went from 20 to 5s andhas a book of 16 and is better hedged than eroc and has worked out its loan line of credit, eroc is in trouble without this deal or management wouldnt do it, it is good for both sides.
I did those numbers from memory the actual figure was the one previous of a net cost of $26455 after commissions,distributions and option premium sorry I didnt look it up again but i was close to actual situation from memory. For those nay sayers they can look up my trades on the Oct $16 calls as I was the only one that traded them on friday, the stock sold for less and more than my entry so it wasnt exactly stellar but I liked the return and wasnt going to get picky as I feel this will close by first week of august for following reasons
1) company says 3rd quarter (july aug sept)
2) eroc pays a distribution around first week of Aug by closing prior to ex date they can avoid paying that distribution and go to VNR distribution which is monthly
3) VNR pays its distribution end of july so they can avoid paying EROC holders by closing Aug 1st until thier distribution end of Aug.
I know it is not a lot but it amounts to 2% plus on the deal and if they are figuring they should do it that way for thier shareholders currently.
Personally I own a lot of BBEP and I like the monthly distributions and wish BBEP would start doing these types of deals It wont hurt my feeling if VNR is below 16 at this closing then I get to keep my VNR shares and if cash becomes available I would do many more of these. Yes oil can crash and you can come up with many reasons not to do any deal but reality is that not to do this deal you have to believe that VNR will be below 13.23. possible but unlikely as that is a 20% sell off.
sure I will walk you through it, I bought 10811 shares of eroc at $29788 I sold 20 oct 16 calls for 2580 net this leaves me with 27208 invested and I will get 2000 shares of VNR but most likely I will recieve one distribution of 7 cents per share on the EROC which is $756 leaving me 26472 invested divided bby 20 is $13.24 per share in VNR.
you are wrong on all counts I did what I recommended on friday I bought 10811 shares of eroc and sold 20 contractrs of VNR$16 calls for Oct If you look this up you can see the trade on the options at 1.30 which is where i sold them. The only downside on VNR is below 13.23 for me but the premium on the option makes the arb more profitable if the stock of vnr is above 16 at closing and I am prepared to own VNR at 13.23 if necessary willingly and happily. The return is 20% and I feel this will close by the first week of Aug for several reasons. I have done many arbs and if my money wasnt tied up I would have 10X as much on this arb. In 2008 when the market crashed I made 50% returns doing arbs.
my experience is to ignore the ambulance chasers they come around every merger, no matter what eroc is worth then go figure what VNR is worth using the same criteria you figured VNR then take .185 times that. The real question is can EROC survive without the merger?? This is a good deal for both parties, if you feel eroc is worth more then hold your VNR stock if not then sell it. VNR will be able to reduce EROC expenses and make it more profitable for all stockholders by synergies and reduce interest costs.
but while it is a little higher than some major pharma it is still low compared to most biopharma for comparison sake look at GILD for the low end and CELG for a higher end. we are low middle.
i see that most of them were put on friday and my guess is that it will depend a lot on who was the buyer or seller of that large position friday and what they know. 12000 plus of those contracts traded friday so it will be interesting come tuesday to see if they closed them out
GILD also has that special pass they purchased that will get their application processed sooner so ICPT would have to beat them to the FDA by 6 months or more to beat them to market and what better use than for a drug that would treat NASH if it has good results.
teddy, I would have agreed with you until I saw how VNR has started buying companies and their balance sheet isnt any better than ours, they are doing it by doing stock swaps which dont affect their debt/asset ratio and do not take any cash, at todays low values I think this is a great long term strategy and I would like to see BBEP do that also. I think EIG should agree to it without any difficulty as it improves their situation also as there is more collateral. You need to be wisely aggressive when the blood is in the street otherwise if you wait you are waiting for another QSR
this is just the regular bs from ambulance chasers and fraudsters. they should be penalized for these activities if unsuccessful
no that is what you get paid for fractional shares, otherwise you get VNR stock and no cash. I wouldnt look at it as if VNR goes down because if it went down more than likely so would have EROC if you want to lock in the buyout price then sell 1 contract of Oct $16 calls for every 541 shares of EROC you own then you will recieve about 3.20 per share for your EROC if VNB is over 16 or you will own VNR at a cost of 13.25 per share. that is what I did today I bought EROC and sold those calls for a nice 20% profit that most likely will only take 3and 1/2 months to get as My guess is that they close before aug 5 but after july 30.as that is the most favorable time for VNR in regards to distributions.
I think all posters should put corvette on ignore and all of those that continue to validate him by posting to him Keep this in mind as further posts could get you into the same category as him IGNORED
well I can think of several reasons, if oil price went up and profits were larger then raising the distribution would help share price go over $7.50 where EIG would be able to make more on thier investment. and be able to convert to stock and recieve more in income monthly than they are now. The reason the restriction is there is to make sure their position is secure, if finances allow then raising the distribution improves their position.
I think this is a great move on both parties part. ERoc will participate through VNR and they are getting bigger without spending cash and thier asset to debt ration will not change much. Their costs will go down as loan rates for larger companies will be better than that for LRE or EROC and they will get cost reduction in administration by cutting some duplicated jobs. This will be good for the bottom line making their cost per bbl of oil a little lower
i didnt try I did it this am i bought 10811 shares of eroc and sold 20 contracts of VNR oct $16 calls for a net cost of $26455 which protects me profitably down to 13.23 on VNR after commissions and distributions.