This was disclosed in the fine print under "Important Notice and Disclaimer" of the new Tobin Smith mailer I just received. Their June 30, 2013 financial report discloses a cash position of only $87,000. Also a negative net worth of minus $375,000, a value which appears to be rapidly declining after every quarter.
One negative is that their patents for Provenge will expire between 2014-2018. This may be one reason they are actively seeking a buyout offer before any of them expire. All of the potential buyers are (or should be) aware of this. If the earnings next month are good, then there could be a chance for a buyout. Otherwise, this could end up being a waiting game by potential buyers for:
(1) Dendreon to go bankrupt so as to acquire the patent rights at a bargain price, or
(2) Wait until the patents expire, thereby getting Provenge for free.
A few of these may be okay, but they will still decline in value after earnings due to the IV drop. Try doing some call spreads as an earning play. With AAPL at 532, the Nov 1, 510/520 call spread for debit of 6.85. Also, the Nov 1 520/540 call spread for a debit of around 10.10. The advantage of doing spreads is that you are paying nothing for time premium (a huge advantage when playing with AAPL options). Also, with the 510/520 spread, you will make max profit if the pps stays above 520 after earnings.
There are other more creative ways to increase shareholder value.
Apple could sell short the April 2014, 500.00 puts and collect 29.20 at the current pps of 530.66
This would give it an effective share buy back at $471 if put to them. Or at a minimum, just keep the premium if the pps remains above $500. This strategy could increase the company earnings by a substantial amount.
But to just buy back shares at $525 would weaken the future growth potential of the company.
Also, if the share buyback is announced at $525, would anyone actually want to sell at this price if we know that the buyback could effectively raise the share price by a substantial amount?
Because he is still holding a substantial number of shares, it makes you wonder why he would announce his sale of shares knowing that it would cause a further drop in the price. Is it because he is planning to add to his remaining position with additional shares at a lower price?
Interesting that this was the low for the S&P at the bottom of the market in 2009.
If you are serious about going long JCP, considered selling short the Jan 2016, 7.00 puts and collect 3.30
This premium is around half the current share price of JCP. However, plan on adding to your short put position if the share price continues to fall.
BBY during the coming holiday season will do much better than the other two. This is because they have the gift items which everyone wants. For the young crowd, they may put off buying new trousers in favor of that new video game. At a minimum, BBY gift cards will be purchased which will be included in their 2013 sales, even though they might not be used until 2014. When was the last time you received a Sears or Penney's gift card? Some people would even consider it an insult to receive such a card as a gift.
However, BBY does have it's problems. This is evident by the fact that they are now compelled to match online prices such as Amazon.
I had shorted the Nov and Dec calls when pps was around 45. The premium was good, even for the Dec 100 calls. I usually close them out when they have lost around 80% of the premium, also taking into consideration the time remaining until exp. After they have lost a lot of time premium, the small remaining potential profit usually does not justify the risk of holding the short position until exp.
What months and strikes are you short?
Is there a site which explains how this is actually achieved? By options and/or futures?
They say NUGT is not affected by contango. However, if there is monthly roll of either options or futures, there will be slippage due to the expenses and higher prices for the roll (assuming there is no backwardization).
Naunce has a negative net worth of over 1.5 billion. Where are they getting the money for this purchase?
They say that the Fed trades the market to make money. Not sure if this is entirely true, but I would imagine that they do come in to support the market to prevent it from collapsing.
I agree that closure is always a possibility. One way to play this would be to buy the Jan 2015, 10.00 puts and to also short the Jan 2014, 65.00 calls for around the same cost. Then if both of these OTM options were to become worthless due to a closure in the near future, there would be no loss.
If you want to go long, try doing something creative, such as the Nov 3.00/4.00 call spread for a debit of 0.50 You could make 100% if the pps goes to just 4.00
Compare this with owning the shares at 3.75 In this instance, the pps would have to go to 7.50 in order to make the 100%.
Now ask yourself which would be more likely to occur: the pps going to 7.50 or just 4.00?
I see a Double Top in UVXY! They say TA does not work for UVXY, but at least it looks like a top.
This morning I went short the Oct 11, 49.00 calls. It takes nerves of steel but so far the trade is looking good. I am going to cover today, if less than 0.50,
"is on behalf of a class consisting of all persons or entities who purchased or otherwise acquired securities of JCPenney between August 20, 2013 and September 26, 2013"
Ackman sold his shares after Aug 27. However, after reading this again, it appears that this class action will only involve those who had purchased the stock between those two dates. Therefore, it appears that Ackman will not be involved in this class action.