CNBC just reiterated that this has nothing to do with the financials of HLF
No need to panic
Imagine how funny it would be if the shares were to collapse forcing Ackman to close out his position. And then Icahn comes in, acquires JCP at a bargain price, and turns it into a profitable company.
Interesting that the low on Thursday of last week and today's AH low are both 14.10
The trader's must be watching this support level very closely. There were a lot of buy orders just above 14.10
Big volume near the close. I wonder if this was because the earnings were leaked or everyone just following the crowd.
I bought some calls right after I heard that the CEO is going to be on CNBC.
It seems that a CEO is more willing to be on TV if the earnings is good.
For the May options, it appears that someone either did an 11.00 straddle or sold puts to finance the purchase of calls. For Sept, 11,600 of the 12.00 calls & 10,000 of the 13.00 calls have traded.
The computers used on CNBC appear to be Apple laptops, but the Apple logo is covered with the CNBC logo.
The large interactive TV which Cramer used this morning has the Samsung name prominently on display.
Since the public stub has not been finalized, there are too many possible variables to say if it is a good deal. There is a recent WSJ article called: "Dell Beware? Clear Channel’s Stub Holders Force Settlement". The article implies that the public stub deal is not always a good choice. WSJ requires you to be a subscriber in order to read the entire article.
Since the new shares will only be a portion of the original shares, they may end up doing a cash settlement of the old options and then issue all new options. Or they may not issue any new options at all - just new shares.
If Michael Dell wants to take the company private, then he obviously does not want to be under the scrutiny of the SEC and shareholders. All shareholders in the public stub as a whole will end up being a minority owner of the company. They may even end up with non voting shares.
Whoever bought the weekly 90 put with just 1 day left to exp is going to be well rewarded. 863 were traded today.
There is another risk to your short call position. The time premium is being suppressed to a low value due to the expectation that the share price will end up essentially at the current price when the deal is done. In the event that all of these buyers were to withdraw their offers, the value of the Jan 2015 15.00 call could easily double in value (assuming the share price remains the same) and you would end up with a loss. But most likely the share price would drop if such an even were to occur.
Are your short calls covered with shares? In the remote chance that all of the offers are withdrawn, this could drop to around 10.00 and you would incur a large loss.
Consider doing the Jan 2014 13.00 / Jan 2015 15.00 call spread for a debit of around 0.90 If any deal is to be done, it would most likely be completed before the end of 2013. If so, the time premium of the short call would collapse. If the buyout price is 15.00 or higher, you could then close out the spread for a credit of 2.00
Breakeven would be if the buyout price is 13.90
I was only referring to a normal buyout. For any other type of buyout, you will have to wait to see what the terms are for the shareholders.
Does anyone here expect a deal with a price much higher than the current share price?
It is interesting to hear Michael Dell say that he will work hard to turn the company into a very profitable one if taken private. Has anyone asked him why he had not done this while it was a public company? Is it really necessary that a company be private before it can become a successful one?
At $7.99 per month, Netflix is operating at a loss. One reason a company buys another one is just to get rid of the competition. Once they acquire their customers, they can then raise the price.
If the deal is accepted, the time premium portion of the option (extrinsic value) would collapse. If you think a deal is imminent, you should not own any out-of-the-money options. Only hold in-the-money options with as little time premium as possible.
The pricing of the options is indicative of everyone's expectation that one of the deals will be accepted at around the current price. With the pps at 14.26, the Jan 2014 13.00 call is a bargain at 1.50 to control 100 shares. Do not own any shares. In the event that there is no buyout, you probably already know where the share price is going to end up.
Dendreon adopts 'poison pill' plan
Sep 24, 2002
Seattle cancer therapy developer Dendreon Corp. said Tuesday it has adopted a stockholder rights plan, also known as a "poison pill" provision, designed to guard against abusive takeover tactics and preserve shareholder value.
Dendreon said the plan is not in response to a specific attempt to acquire control of the company.
The plan calls for holders of Dendreon shares to receive rights to purchase shares of a new series of preferred stock in the event that a person or group acquires or announces a tender offer for 20 percent or more of Dendreon's common stock.
Dendreon said that with certain exceptions, if a person or group acquires 20 percent or more of Dendreon's common stock, all rights holders except the acquirer will be entitled to acquire Dendreon shares at a discount, the effect of which discourages the acquisition of a large portion of the company without negotiations with the board.
I was thinking about how Steve Jobs left Apple and tried to start a new computer company without success. But in his case, his computers were to high end so as to not attract enough buyers. In the end, with two different companies, buyers may end up being confused about which one to buy from.
I have looked at the financial balance sheet on Yahoo but do not fully understand it. What is the actual net worth of the company? I am only referring to the hard assets and not any value related to the name and goodwill, etc.