Yeah, this is perhaps the craziest opportunity that I have seen, ever.
It is available because of a variety of reasons.
1. The company cannot pay it’s debt as it comes due in full without taking on more debt.
2. The equity therefore trades like a call option.
3. You can buy call options on this call option.
4. Like 30% of the equity is sold short.
5. We will see in the next 2 quarters basically how well the company can execute. So I reserved the right in advance while pessimism is thick in the air.
From an operational standpoint, I think the company is doing the right thing, so I actually think my bet might be undersized, but I have my ways.
::::edit 1/9/2013:::: — revisions and disclosure of what i’m talking about below.. i’m still building a position so stay out of the way.. http://www.huffingtonpost.com/2013/09/30/johnny-t-nyc-tourist-tips_n_4016654.html
dex media call options.
in fact, you could end up, if this goes right, turning it into a 1000-bagger.
yeah ha, that’s no joke. it’s insane. say that the stock trades up to 2x FCF, or $45.
Then you’d have scored a 100-bagger on these call options…
and then if you convert it to stock and reverse scale trade all the way up to an 8x FCF price across the following 5 years or so, there’s your 1000 bagger, actually it would be more than that… not to mention rolling forward options, and pullback opportunities, etc.
freaking. nuts… brought to you by the baboons that lack the discipline to do anything but liquidate their positions in directories businesses.. and sure this could turn out wrong, but the fact that the upside is so insane… and that from an operational standpoint the business is as of last quarter at an EBITDA run rate of $880M/year —- this is just insanity… and the best way to take advantage is call options while the monkeys read the next two quarterly reports and then re-evaluate how they feel about their, what in my opinion is anyway, unrelenting pessimism towards a slowly declining $880M/year of EBITDA.