In the 90’s access to derivatives was limited.
Also with that much size, any bank would want a vig to offset lay-off costs.
Plus tables at Le Cirque weren’t cheap.
So I figure there’s two types of securities:
Those that are available to trade publicly and those that aren’t (for example class B or warrants).
In any case, I can’t see how the company can prevent a fund from hedging that position by shorting a different class or with derivatives.
Companies...
So here’s what took 10 seconds to figure out. The underlying value of the options is approx $6. That is you are getting (45 shares * 12 dollars/share xper + 6 dollars cash)/100 = 6 dollars.
Your options are still way out of the money.
It’s legit if you understand the business rationale for diversifying.
Goldman does it because
1. Synergies
2. They hire people to do the work. (They can add time invested to the new business line)
In this guys case, the synergy is supposedly negative as he’s giving away his secrets. Unless...