Yet again, there is some buzz that a deal is in the works between Sprint Nextel (S) and Deutsche Telekom's T-Mobile USA. In fact, it may be more than just a rumor. In early trading Tuesday, the shares of Sprint were up nearly 6%.
In light of the need for spectrum investments, Deutsche Telekom has already said it's looking at strategic partnerships. So could this really be code-speak for a merger deal? Perhaps so.
Continue reading Sprint Considering a Megadeal for T-Mobile USA?
Option volume has ramped up today on KeyCorp (KEY), with activity rising well beyond the usual level on both the call and put side of the tape. Taking a closer look at some of the major block trades on this regional banking issue, it appears that a single spread strategist is responsible for a healthy portion of this option volume.
Specifically, the trader purchased a block of 10,000 June 10 calls for $0.50 each, and simultaneously sold 10,000 June 8 puts for $0.25 each. The result was a net debit of $0.25 per pair of contracts -- which means the speculator can begin collecting profits on those purchased calls if KEY rallies beyond $10.25 by June expiration.
Continue reading Buyout Buzz Inspires Bullish KeyCorp Spread
For the past decade, it's been brutal for shareholders of Alcatel-Lucent (ALU). With the contraction in the telecom market, the sales for equipment has plunged.
Yet since September, investors have been piling into Alcatel-Lucent as the shares have gone from $2.80 to $5.34. The reason? Well, the smartphone megatrend is a key factor. As carriers bolster their networks, they need to go to providers like Alcatel-Lucent.
Continue reading Is Alcatel-Lucent Buyout Bait?
Rumors have been circulating for almost a month about Borders' (BGP) possible bankruptcy filing. People familiar with the situation told The Wall Street Journal that the filing could come as early as the middle of this month.
Borders has been trying to hold off the filing by delaying payments to vendors. But this is only temporary. Now the matter has reached a critical stage. The company has obtained about $500 million to $550 million in debtor in possession financing that would keep the company operating after a court filing.
Continue reading Borders Nears Possible Bankruptcy Filing
BB&T (BBT - option chain) shares are rising today after the Wall Street Journal reported that Sterling Bancshares (SBIB) has put itself up for sale. The Journal listed BBT as one of the banks interested in acquiring Sterling. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on BBT.
BBT opened this morning at $26.83. So far today the stock has hit a low of $26.80 and a high of $27.90. As of 12:15, BBT is trading at $27.87 up $1.00 (3.7%). The chart for BBT looks bullish and S&P gives BBT a positive 4 STARS (out of 5) buy ranking.
Continue reading BB&T May Be a Suitor for Sterling Bancshares
IMAX (IMAX) finished 2010 with a wild trading day. With a little over two-and-a-half hours to go before the market bell, I had noticed that the stock was up an incredible 15.6% to $31.05. On heavy volume. Yes, heavy volume, on the last day of the year.
What was the reason? There was some speculation about a buyout. StreetInisder.com had reported that Sony (SNE) was possibly interested in buying the business. Disney (DIS) was also mentioned as a potential acquirer.
Continue reading IMAX: Interesting Trading Day
Shares of Anadarko Petroleum (APC) gapped higher right out of the gate Thursday morning, thanks to a report that BHP Billiton (BHP) may be eyeing the firm as a potential takeover target. According to the U.K.'s Daily Mail, BHP could be prepping an offer worth $90 per share to acquire Anadarko. However, neither company has issued a formal response to the speculation.
After jumping to a new annual high of $76.50 bright and early Thursday morning, APC is on pace to notch a weekly finish atop the $70 level for the first time since April 23. In fact, if the shares can maintain their positive momentum through Friday's close, the shares could stage their first weekly victory north of $75 since June 2008.
Continue reading Anadarko Petroleum Bounces Higher on Buyout Buzz
Bank of America (BAC) has grabbed some headlines lately, for better or worse. Earlier this week, WikiLeaks founder Julian Assange claimed he would release documents next year pointing to an "ecosystem of corruption" at a major U.S. bank, and many journalists connected a trail of dots leading back to Bank of America. As a result, the stock slipped 3% on Tuesday.
However, Bank of America bounced back with the rest of the market on Wednesday, after one executive at the Charlotte-based bank downplayed the growing speculation. During the course of the session, call volume on BAC rose to two times the usual level, with about 593,000 contracts crossing the tape.
Continue reading Dissecting a Massive Call Spread on Bank of America
Forgive me if I stray slightly, but I could not help thinking about how ironic it would be if someone leaked information as to the whereabouts of Wikileaks founder and "fearless leader" Julian Assange -- who is in hiding!
It would be even more ironic if a CIA operative who had his cover blown by Wikileaks decides what goes around comes around. Let's face it, in its own way Wikileaks has become a rogue nation, so why wouldn't the CIA get involved?
In the mean time, this has probably helped world markets as it has overtaken everything else as the big story of the past 48 hours. In a bizarre way, Assange may have achieved one of his goals by bringing the world closer together, sort of.
Continue reading Serious Money: Does BAC Have Anything to Fear from Wikileaks?
J. Crew Group (JCG) was nearly 17% higher Tuesday morning thanks to rumors of a potential buyout.
The Wall Street Journal (subscription required) reported that a pair of private equity firms are closing in on a deal to purchase J. Crew for $43.50 per share cash, or $3 billion. One of the potential new owners is TPG Capital, a former owner of the company. TPG would hold a 75% stake in the company, with LA-based Leonard Green & Partners owning the remaining 25%. TPG previously owned an 88% stake in JCG in 1997.
Continue reading J. Crew Rallies on Buyout Rumors
For the past few days I have been writing about Apple Inc. (AAPL
) and what it might do with its growing pile of cash, promoting a dividend rather than any misadventures or allowing the cash to continue to drag down earnings per share.
This is not Apple's plan and many readers agree. They believe Steve Jobs and company know what's best about everything and have done fine by them -- the latter part is certainly true.
Today I put it to our readers to check current sentiment.
Continue reading Chasing Value: Questions About Apple?
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