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And in Cash.. 18.00 a share... 20% premium Thought for sure when I saw the announcement was going to be using the incredible run-up on the ATVI stock we've bee

by xfour 11y ago

And in Cash.. 18.00 a share... 20% premium Thought for sure when I saw the announcement was going to be using the incredible run-up on the ATVI stock we've been seeing lately. How exactly they are going to find the 30% increase in revenue year after year on a company that feels exactly like Zynga in its prime. Perhaps Bobby knows something, but I can't seem to be grasp this one.

jonknee 11y ago
To be fair, King IPO'd at $22.50 a share so a lot of people lost out on this deal regardless of the premium. It may not be all cash, the details are still pretty scarce. Update: even worse, nearly 30% of the float is short. There will be a lot of red tomorrow.
- forrestthewoods 11y ago
  "even worse, nearly 30% of the float is short. There will be a lot of red tomorrow." I feel silly asking... but I don't know what this means exactly. Can you explain? :(
  - jonknee 11y ago
    A lot of people were short the stock (e.g. borrowed shares to sell them) and are now on the hook to buy them back for very close to $18 where it will open tomorrow. Shorting is a way to make money when the share price falls. There are always shorts, but King had a ton. If you shorted KING at something greater than $18 you lucked out and have made money, but if you shorted at say $17 you will end up losing $1 per share. It has been under $13 in the past three months so some shorts are going to be losing a fair amount of cash.
    - forrestthewoods 11y ago
      Ahhhh. Got it. Thanks!
    - flashman 11y ago
      Just so I have it straight, I borrow 1000 shares of KING from you and sell them all at $15 each. At some stage, I have to give you back those 1000 shares, so I have to re-buy them. If the price of KING goes down to $12, I can get 1000 shares for $12000, and because I sold the original lot of shares for $15000, I've made $3000. But if KING goes up to $18, then when my loan comes due it costs me $3000 more than what I sold the shares for.
      - jonknee 11y ago
        Exactly. It's slightly more complicated since you pay to borrow the shares, but that's exactly it in concept. It's risky as there are theoretically unlimited losses (shares can keep going up, but they can only fall to $0). Another common, but less risky way to be short is through put options. You buy the right to sell shares at a given price. If you had a put for less $18 you have now lost all your money. Safe to say there will be a lot of money made and a lot of money lost tomorrow when options start trading.
    - deleted 11y ago
      [deleted]
- Rexxar 11y ago
  Update: even worse, nearly 30% of the float is short How can we know this ? Is it published somewhere by the markets/regulators or is it an estimation based on stock/option behaviours ?
  - jonknee 11y ago
    Yes, it's available on some quote websites and probably your broker. Not a live total, but they give you the date and the percentage that is short.

by xfour 11y ago

jonknee 11y ago

To be fair, King IPO'd at $22.50 a share so a lot of people lost out on this deal regardless of the premium. It may not be all cash, the details are still pretty scarce. Update: even worse, nearly 30% of the float is short. There will be a lot of red tomorrow.

forrestthewoods 11y ago
"even worse, nearly 30% of the float is short. There will be a lot of red tomorrow." I feel silly asking... but I don't know what this means exactly. Can you explain? :(
- jonknee 11y ago
  A lot of people were short the stock (e.g. borrowed shares to sell them) and are now on the hook to buy them back for very close to $18 where it will open tomorrow. Shorting is a way to make money when the share price falls. There are always shorts, but King had a ton. If you shorted KING at something greater than $18 you lucked out and have made money, but if you shorted at say $17 you will end up losing $1 per share. It has been under $13 in the past three months so some shorts are going to be losing a fair amount of cash.
  - forrestthewoods 11y ago
    Ahhhh. Got it. Thanks!
  - flashman 11y ago
    Just so I have it straight, I borrow 1000 shares of KING from you and sell them all at $15 each. At some stage, I have to give you back those 1000 shares, so I have to re-buy them. If the price of KING goes down to $12, I can get 1000 shares for $12000, and because I sold the original lot of shares for $15000, I've made $3000. But if KING goes up to $18, then when my loan comes due it costs me $3000 more than what I sold the shares for.
    - jonknee 11y ago
      Exactly. It's slightly more complicated since you pay to borrow the shares, but that's exactly it in concept. It's risky as there are theoretically unlimited losses (shares can keep going up, but they can only fall to $0). Another common, but less risky way to be short is through put options. You buy the right to sell shares at a given price. If you had a put for less $18 you have now lost all your money. Safe to say there will be a lot of money made and a lot of money lost tomorrow when options start trading.
  - deleted 11y ago
    [deleted]
Rexxar 11y ago
Update: even worse, nearly 30% of the float is short How can we know this ? Is it published somewhere by the markets/regulators or is it an estimation based on stock/option behaviours ?
- jonknee 11y ago
  Yes, it's available on some quote websites and probably your broker. Not a live total, but they give you the date and the percentage that is short.