so they are selling off a bug chunk of their business to Carvana.... does that really warrant a move from $13 to $24 ??? I will see how the March Put $25 trade in the morning... anyone else looking at this one??
Good find. Interesting. It's at $22.70 right now. CVNA is paying $2.2B for all of the ADESA assets, website, employees etc. KAR has ~121MM shares outstanding, so that means KAR is receiving approximately $18.20/share. Will that be paid out as a special dividend to shareholders? I doubt all of it will, KAR has about $1.7B of debt. That's probably why they made the deal in the first place. What's the underlying business that remains once the dust settles plus any one time dividends that will be paid out worth? That's the question. Complicated. Probably best to dig into this before you jump into the puts purely based on the size of that move. http://archive.fast-edgar.com/20220224/A3BZT62C8M22NZZU222H2ZZZTLTUZ2T2ZL42/ You can bet there are analysts and professional traders that have been up all night doing exactly that. One thing that's REALLY interesting worth pointing out... over 10% of the float is short. 12.8MM shares lol. And in this case, the float is pretty close to the total shares outstanding. 121MM/119MM There's the trade. Just judging by the large volume trades last night I'm gonna say the pro's think ~$22 is worth it. But with that said, this thing could go ham out of the gate with 12MM shares short, so right now pre-market at $22.50, I'd say buy it now for a quick round trip and dump it before 9:45 EST. Purely to play that squeeze. Only 600K shares have traded so far, soooo -----> that's a looong way from 12MM short. $22 looks like it will hold until the bell at least. Maybe set a stop at $21.34 before the bell just in case. One more thing, you can bet by Monday, there'll be at least 1/2 dozen of those law firms that do the shareholder class-actions (and chop down forests to generate all that mail they send out to every shareholder that ever existed) jumping into this one bigtime. The trade: Get in now at $22.50ish, dump w/i the first 5-45 minutes of regular trading hours to play the squeeze. Stop at 21.34 Right now the shorts that haven't covered are sitting pat, praying and sweating. If it starts heading up, it could REALLY get some momentum.