AGN

O

oldnemesis

http://www.bloomberg.com/news/artic...lergan-said-to-be-close-to-150-billion-merger

http://www.forbes.com/sites/erikake...concerns-that-fraud-is-part-of-corporate-dna/

http://www.fool.com/investing/gener...rial-acquirer-to.aspx?source=eptfxblnk0000004

http://blogs.barrons.com/stockstowatchtoday/2015/11/30/3-reasons-why-investors-undervalue-allergan/

http://stockcharts.com/h-sc/ui?s=agn

Trade:
with AGN at $315
Sept 300/295 bull put spread for a net credit of $50
Yield = 50/450 = 11.1% in 286 days or 14.2% annualized

Price......... Profit / Loss...... ROM %
220.00.......... (450.00)........ -88.90%
250.00.......... (450.00)........ -88.90%
290.00.......... (450.00)........ -88.90%
295.00.......... (450.00)........ -88.90%
299.50............... 0.00............ 0.00%
300.00............. 50.00.......... 11.10%
325.25............. 50.00.......... 11.10%
350.00............. 50.00.......... 11.10%
395.00............. 50.00.......... 11.10%

filled
 
http://finance.yahoo.com/news/u-inversion-rules-threatens-pfizer-021029803.html

http://finance.yahoo.com/news/treasury-department-sets-sights-against-215148835.html

http://blogs.barrons.com/focusonfun...-for-pfizer-merger/?mod=yahoobarrons&ru=yahoo

AGN is down 60 points after hours.

It's going to cost me $450 per contract (9 times the premium collected).

This is the risk you take in doing these trades and that risk has to be built into your portfolio. This loss has been built into my portfolio for a while. It's why I do spreads instead of short puts and hedge the downside or bail out before I get bitten.

The market (and I) have seen this coming for quite a while as AGN has lagged behind its projected purchase price:

http://finance.yahoo.com/echarts?s=AGN+Interactive#{"range":"2y","allowChartStacking":true}

The original deal had AGN valued at $363 a share.
 
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Pulling this from StockTwits:
original_52292284.
 
http://finance.yahoo.com/news/analysts-inversion-rules-kill-pfizer-175309683.html

I'm not THAT certain the deal will be cancelled. There is more to the future than these rule changes... and Pfizer may want to continue it's inversion strategy anyway.

I have no idea what that posting by 'Convertibility' is either. Maybe he posted it by mistake.

I am, this morning, proud of my portfolio structure. After such a disastrous occurrence my portfolio value is about the same as before.

Perhaps I have achieved the holy grail: Riskless profits.

:-)
 
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Sounds like Jim Cramer lost some serious money on AGN :

http://www.thestreet.com/story/1345...ll-make-you-broke.html?puc=yahoo&cm_ven=YAHOO

He says: 'no one saw it coming'

I'm sorry, but (as I pointed out above) a lot of people at least suspected that it might.

Well...Pfizer has yet to officially back out. It is true that Treas said they couldn't and wouldn't and then they did. This will cost Pfizer a lot of money if they do back out.

A Tale of risk:

Last year 6 people were bitten by sharks on the SC beaches. On Sunday I was sitting on the beach in my beach chair watching a guy fishing in the surf. This is a good way catch fish but it is dangerous because you are in the shark's territory throwing around bait and just asking him to take a bite of you. At this time of year it SHOULD be safe because the water is still too cold to attract the fish the sharks come here to eat.

As I was sitting there I saw the tell-tale dorsal fin moving horizontally between waves. I jumped up on my beach chair and whistled and yelled ...SHARK... . The surf fisher turned and also saw the fin and hightailed it out of the water.

The funny thing was the fisherman ran to his chair and got his camera and tried to get the shark's portrait.

People are nuts... but risk is a part of life. No risk=No fish.

 
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