Hi Jill. Ref your Palm IPO question on another thread, 20% of Palm will be sold by COMS at the IPO probably in February, and the remaining 80% of Palm will be distributed to COMS stockholders "2 quarters later". Merrill's breakup analysis values 3Com at $33-53/share, with Palm at 40-50% of that. I think that Palm value is conservative short term because of typical IPO enthusiasm these days.
I'm looking to pickup Palm shares LTB&H as a wireless endpoint play, and I'm playing it with some July $45 call options on COMS that I got a few weeks ago slightly OTM. IMO it looks too risky to hold all the options for a single play, so I'm planning on selling parts over the whole timeframe from initial IPO runup in Feb to (hopefully) well appreciated post-IPO in July, dodging around a presumed 2-month correction somewhere in March-June timeframe.
I'll pick up COMS shares by exercising a portion of the options, financed by selling the majority of the options, where the option sale price determines how many shares I can afford.
All opinions on this strategy would be appreciated.
- Dway
PS: Added value play - after the Palm distribution to COMS shareholders, take delivery of the COMS shares and redecorate the kitchen, gotta figure COMS shares are going to be cheaper than wallpaper :-) |
