Volume Spike Investor » BCE

Massive Volume Spike: BCE (BCE)

247admin — Wed, 26 Nov 2008 15:22:45 +0000

BCE, Inc. (NYSE: BCE) is about to have a crummy trading day. Shares are getting killed this morning after KPMG issued an opinion statement that because of a decline in assets and because of the extra debt burden on a post-merger basis, it could not give a “solvency letter” by the December 11 merger closing date. FULL DETAILS HERE

Shares closed yesterday at $31.28… and now shares are down massively by almost 40% with about 3 minutes to the open at $18.90. We have also seen more than 4.3 million shares trade hands.

Another merger looks at risk of imploding….

Jon C. Ogg
November 26, 2008

After-Hours Spike: BCE (BCE)

247admin — Fri, 20 Jun 2008 21:25:30 +0000

If you have been following the BCE Inc. (NYSE: BCE) merger saga, you’ll be happy to know it looks like it is ending. The Canadian courts have ruled that the Ontario Teachers buyout can proceed despite the bondholders’ complaints. This has traded more than 2.2 million shares in after-hours trading today at 5:20 PM EST. The stock is up roughly 10% at $37.50 after closing at $34.10 in regular trading. That is almost twice the average volume and just in the after-hours session alone. This stock also saw highly active options activity in the June expiration dates that just expired at 4:00 PM EST.

52-week trading range: $32.20 to $44.59

Market cap: $27.4 Billion before the pop

OPTIONS: YES

Jon Ogg

June 20, 2008

Options Volume Spike: BCE (BCE)

247admin — Thu, 29 May 2008 18:30:07 +0000

There has been some highly unusual options activity today in BCE, Inc. (NYSE: BCE). Not only that, but it is for current run expiration dates on the puts and calls in June 2008 (expire June 20).

We have seen over 20,000 contracts trade in both the $35.00 June Calls and Puts today, so someone is likely making a bet that the price is heading considerably up or considerably down. There have been 20,045 contracts of the JUNE $35 CALLS and 20,150 contracts of the JUNE $35.00 PUTS. The open interest before this was only 5,320 contracts on the calls and 4,360 on the puts.

This represents a bet of more than 2 million shares on a leveraged basis, and this was very likely a straddle. If we take the “last” trades and calculate the premiums of $1.35 for the calls and $1.40 for the puts, then whoever bought this believes that BCE shares are headed north of $37.75 or south of $32.25 by June 20.

As a reminder, after the Clear Channel deal changed and after so many other mergers have fallen apart, BCE was the “other big merger speculation” play where many thought the terms of a deal would change. BCE is Canada’s largest telecom operator, and the company asked the nation’s Supreme Court yesterday to hear its case to overturn a lower court’s decision that would likely prevent its $35 billion sale to the Ontario Teachers Pension Fund.

This merger was agreed to in June 2007, so it has been on the books for some time. Shareholders have also approved the merger with roughly a $43.20 price in US dollar terms.

It looks like the deadline is Friday (tomorrow) and if this is reheard it appears that June 17 would be that date.

It is really easy to see why someone made this bet. Just on May 22, this stock traded more than 20 million shares and its shares fell more than 10%. On that day it closed at $33.10. The day before it closed at $37.83. On May 13 it was at $39.01.

If the merger truly breaks apart, this one is likely to head much lower towards $30.00. If the merger is allowed to proceed it could head back up towards $40.00 or even higher. Then we’ll see if the financing changes.

Jon Ogg
May 29, 2008