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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: carranza2 who wrote (51194)5/2/2002 10:08:51 AM
From: Kayaker  Read Replies (1) of 54805
 
Qualcomm and junk bonds

Another option for Qualcomm would be to short puts on QCOM. For example, they could short the Jan 20 put this morning for $1.75. That's a (1.75/18.25) = 9.6% return in 9 months, or a 12.8% return annualized (plus the interest on the cash backing the puts). In January, they either get put their shares at a net share price of 18.75, or if the stock is above 20, they just keep the 9.6% return.

I know shorting puts on their own stock got MSFT and DELL into some trouble as techs crashed, but at these low levels it's seems (to my little pea brain) a decent way to either make a better return or buy back their shares in the teens.

Edit: Bid on the puts is now $1.85.
Edit: Bid on the puts is now $1.90.
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