written by reader What am I missing?

By atmotsi, December 16, 2015

Visteon VC sells automotive equipment. Here is Yahoo link to profile if interested http://finance.yahoo.com/q/pr?s=VC+Profile. Recently they sold a chunk of the business for about $3.6bil. Couple of days ago they decided to give a little back to shareholders via a $43.40 special dividend, paid 1/22, ex-date 1/25 and a $500mil stock buyback. (Tentative dates) Total is about $2.25bil. VC is now selling for about $117. I checked and March 90 puts are now about .25-.50. Anybody see the flaw in my logic?o

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Travis Johnson, Stock Gumshoe
December 16, 2015 12:04 am

The option strike price will be reset to include the special dividend — generally, any special dividend over a certain amount (I think it might be 10 percent) will cause the options to be reset.

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