There's heavy near-term option ownership on deep in the money QRE calls and BBEP puts. The price moves yesterday made both worth significantly more. The volume and price action today look like both sides are exercising and the shares are being dumped by both the callers and the put-upon.. Add in people in QRE bailing on their shares just because of the pop, maybe because of the new risk. If I could trust the legal situation more I'd say it's filthy oversold and a bargain-shopping buyer's market.
I said "retrace", not "fall".
BBEP dropped in response to the announcement and has dropped more since. If the deal is cancelled it goes back where it was, same as QRE does. Both legs move against you.
deal falls through, both stock retrace, you lose the purchase premium on QRE and get called on BBEP which takes back the sale premium and more. the market is heavily weighting cancelation here. but I think repricing is possible or management goes through and fights the lawsuits. more the former. but I'd like to see management respond before I make a move. like I said, this wasn't intended to be a gamble.
no reason for it to stop. and then BBEP will pay it.
but here's my question. BBEP's yield is lower than QRE's. why would there be an increase in the dividend? much less an increase in yield after the reduction in share count for QRE holders?
The lawsuit trolls provide the clues.
QR common is class A. There's also a voting class B and a convertible class C. There's also debt.
The enterprise value of the deal (equity plus debt) is $3 billion. But the offer of shares only comes out to $1.5 billion. That's ~20% better than yesterday's market cap of 1.25 billion, but clearly not a real deal.
If management take the lawsuit trolls seriously, and I'm starting to think they should, then right now QRE's the better buy. But management may look at the litigation and BBEP may look at what it would have to add to the deal and the deal could fall apart.
Your nice, pokey little income stock just became a gambler's nightmare. Saddle up and tighten your seatbelts, everyone. The captain wants to water-ski.
Okay. I see why the lawsuit trolls are out. Apparently the splashy "$3B" number is enterprise value, and includes the debt. The actual price is only about a 20% premium to yesterday's close. That's weak.
I replied to this but it disappeared. i'm going to short Yahoo and ask them to move to Bangalore.
They should trade in lockstep until something happens. If you expect a breakup of the merger, today's action is your clue. QRE will drop (probably overshoot, too) and BBEP will retrace upward. If not, they're probably married.
Unless somehow the market is misvaluing the A/B share comparison.
How many are there and what do they own that common doesn't? Or is the common the class B (it can happen)?
I think that's where the missing portion of the share price went.
Sprint owned spectrum, a unique product that nobody else can use in their territories, and had millions of customers paying them continuously. AMD owns nothing anyone wants.
Haha. You had an ugly haircut on Friday.
Missing decimal point aside, Bankruptcy is AMD's only option at this point.
It utterly failed to find a transformative technology to build a moat around itself, and now it's just another hobo trying to wipe windshields with a greasy rag. The only product segment it dominates is console game chips, and game designers are starting to say they won't even develop for consoles because the new generation started out behind PCs and are dropping further and further back all the time.
AMD's window is closed. One tiny bit of negative guidance and it tanked 20% overnight. It can crash another 50-80% in a day when management starts sweating when asked about bankruptcy.
"The market — motorists who are within a full-tank of gas from Atlantic City — is worth about $6 billion, said Israel Posner, executive director of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at the Richard Stockton College of New Jersey."
It's actually worth less than $3 billion. But at least we know who to blame for all the overinvestment. People who can't add.
The only question remaining is how this will affect Chris Christie. You know he'd be claiming to be the son of god if revenues were up 10%. Now that they're plummeting he's nowhere to be seen (and that's hard to do).
It tells me that AMD can gain revs by 24% and still find a way to lose money.
You are being scammed. Sell out while you still have something to sell. Go short. You won't have to cover.
It's been stone cold dead for years.
Red like blood.