This is a long term trade and I am detailing it earlier on than I did the gold trade I chronicled on StockTwits for years and wrote a postmortem on here.
My thesis is one of extreme value of a set of assets that have been mismanaged for many years and trying to get ahead of larger activists which is beginning to play out now. Run better, I view $YHOO properties as having a ton of value that might be unlocked over time.
I am long a 1/2 position of $YHOO shares and have managed my position so that my cost basis is 14.65. My first purchase came from selling 16 puts for .45 after the stock got hit on the Alibaba news and have sold near dated covered calls and naked puts lower which have expired since.
I sell the near dated puts incrementally when the stock sells off over multiple sessions in order to either capture the premium or build my position. Ultimately, if I don’t get put, I am ok missing a run as new opportunities will always present themselves over time, I capture the premium and I am very patient.
Also, I like the theta trade of near dated out of the money options trading well above normal implied volatility levels if I am willing to be long the stock and have the available risk allocated capital.
I plan to sell Sept. 16 calls at .2 or above this afternoon (maybe a touch lower than that at the close) on half the position if the price gets there which expire in 6.5 trading days in order to lower my basis further. I am willing to sell half the position at or around 16.2 next Friday.
I may make further attempts to add to the position on weakness again by selling near dated out of the money puts.
Some comments on recent events:
1. The way that the board and Carol Bartz handled her firing serves as a perfect representation of the mishandling of the company from the top down.
3. Loeb built a 5.1% stake in the stock during and after it was getting crushed. Simply amazing trading there to accumulate so much without jamming it higher and without being noticed. All the while, crafting his message. Amazing work and plan.
4. Loeb’s letter to the board is spot on and in my opinion will resonate and usher in a battle that will last longer than one might expect.