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Not to stray off the political topic, which, by the way, is a waste of space, but I wanted to take a look at "The Zenit Hedge." For Loral shareholders, it appears that one could hedge the effects of G* by buying one G* put per 600 Loral shares held. For additional insurance, and to factor in the Soros deal as well as dilution from the secondary(which, by the way, is held up in some kind of SEC audit), it is probably best to figure one G* put per 500 Loral shares. That would, in effect, protect your Loral holdings from any complications, be it a catastrophe or delay, of a G* Zenit-2 launch. A SEP60 put would cost you $700, a SEP55, $475. Going a bit further out, a DEC60 put would cost $925, a DEC55 $625. That may be a small price to pay to give piece of mind to those with huge gains in their Loral shares already. To put it in perspective, using the SEP60's as an example, you can ask yourself---"Self, am I willing to spend $1.40 per Loral share to protect myself from a Zenit-2 launch problem???" That question can only be answered by each individual based on his tolerance of risk and his desire for reward. |
