NM up 5/8 to 9 3/4 on volume of 935,000 shares traded.
It's a good thing that you got the calls. If the stock gets to $15-16, the return on today's Mar 10 (NMCB) is about 6.5-1. The May 10 presents a 3.5-1 return. I'm curious as to why you chose the May 10 when the May 12.5 would offer a 4.5-1 return (on a stock price of $15-16). The premium on the May 10 is really high. Were you not able to buy any Mar or Apr 12.5 calls?
The Inquirer is not going to report anything unless it is substantive. You will probably read something when the 13D is filed (next week). All that is officially known is that some buyer is acquiring massive amounts of stock. The shares got as high as 10.125 at around 2:30 today, as nearly 200,00 shares were traded (mostly buys) within about 15 minutes.
Upon further consideration and review of possible acquirors, I believe that ValueVision is not likely. I can't imagine how they could afford NM aside from a major leveraged buyout. Apparently SFE stock is not impressed with NM's activity, since it closed just above $22 today. My 4 guesses are HSN, Inc. (HSNI), News Corp. (NWS), Viacom (VIA/B) and Liberty Media (LBTYA).
HSNI stock has gone from 20 to 28 (40%) in about a week. Since the December merger with Silver King Communications and Savoy Pictures Entertainment, the new company looks decent. It has negative working capital, though, and its overall ratio is about 2-1, which is okay. Their proforma 1996 revenues were about 1 billion, so adding NM would increase the sales to about 1.4 billion.
Viacom and Liberty are less likely candidates, IMO, because Viacom is not a significant player in infomercials, and Liberty owns 19.9% of HSNI, as well as minority equity interests in many broadcasting/cable/programming companies. However, Liberty and News Corp. have jointly acquired companies in the past (with each other). In addition, before the 12/96 merger to form HSNI, NWS owned 30% (I think) of Savoy, and LBTYA owned 20% of Home Shopping Network. So they may be in cahoots this time.
However, since NWS owns part of Guthy-Renker, it might be in their best interest to buy NM, and thereby dominate the infomercial arena. If HSNI buys NM, then HSNI will likely become the dominant infomercial/electronic retailing/home shopping company. So both NWS and HSNI have significant interests (both figuratively and perhaps literally) in a buyout of NM.
Another exciting day at the races. I wonder what tomorrow will bring.
TDW |
