Rich: Just thinking out loud here, I went back to one of your postings which, from certain standpoints, has proven prescient. That is:
BEST is likely manipulating and holding the stock to a predetermined price, for a brief period of time, in order to price the options they will buy/sell to the plaintiffs to 'protect' their shares until the fall when they are distributed. The assumption is that the plaintiffs would want to buy a put at, say, $22/share, and also offset the cost by writing a call just above the $29.50 shareprice of the time of the settlement. BEST is on the other side of these trades. It is in the interest of BEST to hold the stock well down while the options are priced (outside of the publicly traded options market, so we won't see them), in order to minimize the risk that BEST would have the stock 'put' to them come fall if things didn't work out for VLNC. Conversely, the presumed low ceiling on the calls means that the plaintiffs won't actually get shares when all is said and done. BEST will call them away, say if the stock is $50 in September, since they would own $30 calls on the 600k shares, for example. Sweet deal, eh? Plaintiffs get taken to the cleaners again.
Interestingly enough this "capping for a brief period" is what is still going on today. Indeed, as I write this I see they've just set up a 10.4K block on the ask, with only a size of 3 registering on the bid. Ordinarily I'd expect a stocks valuation to slide in the face of that ask size. But it's not. Therefore sumbody's put a lid on VLNC right at ~$15. The question now becomes....how long will the ASK gambit be employed at this point, given your above statement reflects the current reality.
Enquiring minds would like to know.... ;-)
Regards!
John~ |
