Imclone Systems (IMCL) and Eli Lilly (LLY) announced today that they have agreed upon Eli Lilly's final buyout offer of $70/share for Imclone. Rival bidder Bristol-Myers Squibb (BMY) has abandoned its competing offer and is willing to walk away with a payday from the surrender of its existing stake in Imclone.
My play: Looking at the long-duration option chains, this is a classic special situation play. The longest calls available, Jan 10, haven't been zeroed out yet. Today I placed an order to sell uncovered Jan 10 calls at 75, well above the final agreed-upon acquisition price. I expect the value of these options to fall slightly upon order execution tomorrow, but I should still net something to make this worth my while. I may go long the stock of IMCL in the near term, but the market's continuing weakness means that I'd miss out on some bargains in the widely-held ETFs I'm following. Stay tuned.
Nota bene: Anthony J. Alfidi holds no positions in the common shares of IMCL, LLY, or BMY at the time this commentary was published.
My play: Looking at the long-duration option chains, this is a classic special situation play. The longest calls available, Jan 10, haven't been zeroed out yet. Today I placed an order to sell uncovered Jan 10 calls at 75, well above the final agreed-upon acquisition price. I expect the value of these options to fall slightly upon order execution tomorrow, but I should still net something to make this worth my while. I may go long the stock of IMCL in the near term, but the market's continuing weakness means that I'd miss out on some bargains in the widely-held ETFs I'm following. Stay tuned.
Nota bene: Anthony J. Alfidi holds no positions in the common shares of IMCL, LLY, or BMY at the time this commentary was published.
