The Wall Street Journal-20080205-Investors Continue to Position in Yahoo
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Investors Continue to Position in Yahoo
Full Text (222 words)Microsoft Corp.'s unsolicited $44.6 billion bid for Yahoo Inc. continued to create ripples with the options contracts of related companies.
Yahoo contracts continued to be among the most heavily traded yesterday. In total, more than 276,000 calls traded against 81,000 puts.
Shares rose 3.4% to $29.33.
Much of the activity was within the $31-a-share offer by Microsoft. Nearly 16,500 March 27.50 calls, which give holders the right to buy the stock at $27.50 a share when they expire, traded, compared with open interest of 11,000. Nearly 40,000 March 30 calls changed hands, versus open interest of 27,700.
Some traders are still holding out for a better offer. More than 11,000 March 35 calls traded, compared with open interest of 2,000.
Other related companies saw some volume. IAC/InteractiveCorp and Time Warner Inc.'s AOL business are seen as possible outside bidders for Yahoo, although the possibility for now appears remote. Both companies are also slated to report quarterly earnings tomorrow.
IAC saw nearly 2,200 puts trade against 400 calls, which indicates traders are pessimistic over the company.
Nearly 1,800 April 22.50 puts traded against open interest of 2,700.
IAC shares fell 2.1% to $25.72.
Time Warner, meanwhile, saw 8,300 calls trade against 4,000 puts.
Nearly 1,400 March 17 calls changed hands, compared with open interest of 1,000.
