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American Capital Agency Corp. Message Board

yourbestfriendintheworld 227 posts  |  Last Activity: 4 hours ago Member since: Jan 12, 2007
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  • Reply to

    Sell BBEP short, buy QRE?

    by coochy.cooty Jul 29, 2014 12:57 PM
    yourbestfriendintheworld yourbestfriendintheworld Jul 29, 2014 1:44 PM Flag

    trading any form of the company (shorting against the box, buying protective Puts, etc.) against yourself affects your tax basis. it doesn't matter if it's more or less than the size of your current holdings or any particular tranche you bought. it only matters which tranche you sell first and how you want to organize things when you report.

    and you won't lose by arbitraging BBEP against QRE unless the deal gets backed out. but then you'll get your #$%$ handed to you.

    like i said, these stocks changed from stodgy income stocks to gambling dice the moment this deal was announced, and that will be the case until all of the lawsuits are adjudicated or settled.

    i chose to eliminate risk (by flipping from QRE to BBEP), and it'll eventually cost me about a buck a share (lost opportunity; they're both likely to rise before then but QRE can rise a buck more). you may choose to enhance it to make that buck a share; but the downside possible is a small chance of losing several dollars a share in that case. so it's up to you.

  • yourbestfriendintheworld by yourbestfriendintheworld Jul 29, 2014 1:32 PM Flag

    1. It's printing money.

    2. It's building a new money-printing press in Cotai. That one will at least double revenues and profits coming from Macau.

    3. It's still in the running in Boston and Japan, and a win in either location will be significantly accretive, though of course nothing like the bump from Wynn Palace in Cotai.

    4. The Chinese are perturbative, but clearly supportive of Macau's present and future success. They aren't going to shut it down, and they aren't going to stop people from bringing their money. The worst thing they could do to Macau is open another gaming town elsewhere in China, but there's no reason to believe that any of the actors in Macau would be shut out there, and that would just mean growth and easier access to even more Chinese gamblers.

    So the question isn't why should WYNN go up, it's how the hell can you even think of it going down?

  • yourbestfriendintheworld yourbestfriendintheworld Jul 29, 2014 1:24 PM Flag

    So what is your bid on an Aug 1 $195 Put?

    With your confidence it should be well over $5.

    The market is offering them for 3 cents each.

    How often have you outguessed the entire market?

    Maybe you need a different place to put your money, because this one is going to grind you to pulp.

  • Reply to

    Barron's

    by yourbestfriendintheworld Jul 29, 2014 10:47 AM
    yourbestfriendintheworld yourbestfriendintheworld Jul 29, 2014 10:48 AM Flag

    UPDATE: LOL.

  • yourbestfriendintheworld by yourbestfriendintheworld Jul 29, 2014 10:47 AM Flag

    Ouch. Misread the report, much?

  • Reply to

    imho

    by mrfruityloomy Jul 29, 2014 5:51 AM
    yourbestfriendintheworld yourbestfriendintheworld Jul 29, 2014 10:46 AM Flag

    Data point accomplishment achieved.

  • yourbestfriendintheworld by yourbestfriendintheworld Jul 28, 2014 2:22 PM Flag

    Rory's stuck. All his plans to dominate the high seas arrrr--er, are falling flat.

    At least Lisa Su made herself a few extra bucks insider-trading on you clowns.

    I will never have to cover.

  • Reply to

    Here's an ugly thought

    by coochy.cooty Jul 27, 2014 7:51 PM
    yourbestfriendintheworld yourbestfriendintheworld Jul 28, 2014 1:11 PM Flag

    I think we're watching the shorts climb out of QRE right now. Only reason for it to move so quickly towards the proper ratio to BBEP. This of course shoots me in the foot, since I flipped from QRE to BBEP to eliminate the downside (if the merger fails, QRE will indeed crash back to its own level, while BBEP won't; meanwhile, that risk is slightly discounting the ratio; and anything else that goes on in either company and in their production and competition will affects both of them equally because they're effectively one thing now; so BBEP is QRE with no downside risk, and QRE is BBEP with a big downside risk and a few percent more upside to gain before the shares trade hands).

  • yourbestfriendintheworld yourbestfriendintheworld Jul 28, 2014 12:08 PM Flag

    Occupy never had any effect on casinos.

  • Reply to

    Do We Have a Floor...

    by aspenmarsh Jul 25, 2014 2:02 PM
    yourbestfriendintheworld yourbestfriendintheworld Jul 26, 2014 2:05 AM Flag

    delete and repost. and no; yhoo did the last redesign, realized there's no money in pages people spend more than 30 seconds interacting with, and left it to rot. if they ever notice it's still here, I have little doubt they'll simply pull the plug.

  • Reply to

    Oh. No S**t, Sherlock.

    by yourbestfriendintheworld Jul 25, 2014 11:03 AM
    yourbestfriendintheworld yourbestfriendintheworld Jul 25, 2014 5:10 PM Flag

    About noon it looked like the arbs had given up, but then they came back from lunch.

    I'm keeping my eyes open for signs I shouldn't have switched, but I still like my chances.

  • Reply to

    Oh. No S**t, Sherlock.

    by yourbestfriendintheworld Jul 25, 2014 11:03 AM
    yourbestfriendintheworld yourbestfriendintheworld Jul 25, 2014 1:24 PM Flag

    That $80 million will be where the lawyers are aiming to settle, since they know the company's stuck for it. They could back out and pay it just to avoid the risk of paying more; and then they could get it back as part of the revised offer if there is one. Like I said, the vultures have a point. Up- and down-side risk are about equal on QRE. There's no visible downside risk on BBEP. It goes up if there's a breakup (and thanks QRE for its $80 million) and it goes up if the deal goes through because that's why you make deals. If it has to sweeten the deal to keep QRE in, that's the only open risk, but getting the deal, again, is a positive for BBEP, which will temper the hit to NPV.

    The biggest risk in all of this is if they have to pay more to the Class C holders. They're getting cash, while the B's and us muppets are getting the same BBEP common shares (though why the B's should get the same price as the proles is a mystery... I suspect they're the ones who tipped off the litigation trolls). The cash just disappears from the kitty, and gives us no shot at it in the future.

  • yourbestfriendintheworld by yourbestfriendintheworld Jul 25, 2014 11:03 AM Flag

    QRE popped. BBEP dropped. They're now in lockstep, so if they go through the deal they benefit equally. But if the deal fails BBEP pops and QRE drops.

    So I just traded in all my QRE for an equal value of BBEP. No change in my fate if the deal closes and upside if the deal bombs. The divs are slightly smaller (4.6% lower income rate), but at the moment the divs aren't the main consideration..

    There is one risk bullet, though. If QRE demands more money, BBEP will drop and QRE will increase. I may be flipping the other way if that starts to look likely.

  • yourbestfriendintheworld by yourbestfriendintheworld Jul 25, 2014 10:22 AM Flag

    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.

  • Reply to

    Someone catch me on this, because I'm thick

    by coochy.cooty Jul 25, 2014 9:31 AM
    yourbestfriendintheworld yourbestfriendintheworld Jul 25, 2014 10:16 AM Flag

    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.

  • Reply to

    Someone catch me on this, because I'm thick

    by coochy.cooty Jul 25, 2014 9:31 AM
    yourbestfriendintheworld yourbestfriendintheworld Jul 25, 2014 10:03 AM Flag

    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.

  • Reply to

    div

    by bobbyjopro Jul 24, 2014 3:19 PM
    yourbestfriendintheworld yourbestfriendintheworld Jul 24, 2014 4:24 PM Flag

    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?

  • yourbestfriendintheworld by yourbestfriendintheworld Jul 24, 2014 2:38 PM Flag

    Posts going missing.
    1 hour 3 minutes ago by yourbestfriendintheworld
    This topic is deleted.

  • Reply to

    ambulance chasers

    by rwschell Jul 24, 2014 2:27 PM
    yourbestfriendintheworld yourbestfriendintheworld Jul 24, 2014 2:31 PM Flag

    they may have a point. see my previous message.

  • yourbestfriendintheworld yourbestfriendintheworld Jul 24, 2014 1:44 PM Flag

    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.

AGNC
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