Tuesday, February 12, 2013

Suntech Bonds Trade at 35 ($STP)

Bonds are tanking on heavy volume today, including a million at 34.5, which was a YTM of >2100%!

You can buy a Jun $2 put for $1 which will double if the stock recovers zero in a liquidation.
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7 comments:

  1. mishaFebruary 12, 2013 at 9:20 PM

    And if the stock is halted?

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  2. CPFebruary 12, 2013 at 9:41 PM

    Longs need to be able to close out to realize losses.

    Can you give an example of a company with a bond maturity where the stock stopped trading?

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  3. C.R.L.February 13, 2013 at 8:28 AM

    Love how momos and HFTs are still pushing this stock higher....Guess they don't have capital structures programmed into their algos.

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  4. CPFebruary 13, 2013 at 10:56 AM

    ytm on the bond now over 2000%

    bondholders expecting to lose 351 million - greater than the current market cap

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  5. mishaFebruary 13, 2013 at 12:32 PM

    Didn't China Medical get suspended?

    No matter; I'm not disagreeing with the investment premise; I'm playing it via bear call spreads and outright short calls.


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  6. mishaFebruary 13, 2013 at 12:32 PM

    This comment has been removed by the author.

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  7. ABV FundFebruary 14, 2013 at 7:42 AM

    Hello -
    Agree with your analysis.

    new to using puts "to go long short" - i am curious- what happens to the puts if the stock stops trading or is delisted from the NYSE.

    If one uses tdameritrade etc. we can easily buy a June or Sept $2call for $1/$1.40 etc. At default, the stock price should decline - but if it falls below $1 - wont the NYSE remove it within 30day? does one need to close the position before its booted by the nyse or can one just sit back and watch this stock crash all the way to expiry.

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