Valuing LEAPS When Taking A Company Private
by portland6 | January 29, 2022 11:20 pm
Can someone direct to a resource that explains how a “current” call or put option is valued at the time a company’s shares are de-listed by taking it private… for example early in the week speculation / noise of TCEHY potentially taking DOYU private… there are LEAPS with expiry in 01.2023 and 01.2024… assume the deal occurs before January 2023 for example then how are the call and put options[1] valued (above and below the strike price) between the dates the deal is announced and closes – it would seem if the current price is below the call option strike price on the date the deal closes you lose – if it is above then there must be a formula to determine the value – thanks
- options: https://www.stockgumshoe.com/tag/options/
Source URL: https://www.stockgumshoe.com/2022/01/microblog-valuing-leaps-when-taking-a-company-private/
The CBOE will adjust the options contract if there’s a takeover before expiration , so instead of 100 shares the option will be for whatever the takeover consideration is, usually some number of shares of the acquiring company and/or an amount of cash — if the takeover price is below the option price, you’re pretty much out of luck if it’s a cash acquisition, there’s no premium for potential future value, even if the option still has a year to run, just an adjustment based on the actual takeover.
Thanks Travis… better prospects than I originally thought
Does anybody know what Keith Kaplan is referring to as:
“Digitized Nano Power”,
“A Hypertrend Set to Burn Big Power to the Ground… and Erect a $1.2 trillion Nano Power Ecosystem from the Ashes”,
the “Power Company of the Future”,
this “Power Company of the Future”, has set up shop in what’s been called “the most innovative square mile on earth”, just steps from Amazon’s own secretive tech hub in Massachusetts.
“We’ve got potentially over 100 million nano-power plants in the works that will generate power for millions of people…
These are in people’s homes and businesses.
Then we have nano-power grid technology that moves that power from place to place…
Potentially replacing all the outdated pipelines and high voltage equipment that caused those deadly wildfires in California…
And finally, we have a digitized distribution system that could allow us to essentially make money from “neighbor to neighbor” power markets all around us…”
https://secure.tradesmith.com/?cid=MKT583175&eid=MKT606892&encryptedSnaid=HxSdGjyEblxI5eeGISqtaJ3hy%2FNntkkRpUWApWHTDPo%3D&snaid=SAC0003186646&step=start&emailjobid=5090977&emailname=220130-TDS-Free-Ded-TIB-PowerFi-A-Lift2&assetId=AST207520&page=2
I was hoping you’d get a reply. I saw this Keith Kaplan pitch as well and was trying to figure out the company involved.
Maybe @travis will help?
Maybe @Travis will help?