by Gavin M.
The image above can't be more accurate. Investors got killed today and I mean really got killed. How many out there actually bought BBRY < $9 in the entire history of the stock???
Here's the summary:
How does a common investor make sense of this? Think of Promise Rings. A Promise Ring is something someone gives to their partner with the intention of committing to them at a later date. In essence, it doesn't really mean anything. It's just symbolic and emotionally binding but nothing legal or physical about it. The worst thing is that there are no guarantees they will be able to get financing for BlackBerry.
This is just a temporary stop-gap - a band aid if you will. Those who are confident that they will be bought out, will do they best to buy at prices lower than $9. Those who believe that no one will buy BBRY, will short it at $9 and hold that short until November 4, 2013. It's really plain and simple.
I personally am going to short BBRY because I don't think this deal will go through. But for now, it seems for the next 6 weeks, the trading range will be super tight and only options spreads might make you money on this one.
At the same time, who really thinks someone will outbid Fairfax for BBRY? It's drowning it is own pool of blood - burning through a ton of cash each month. I think the biggest loser here really is FairFax, not the investors.
Whichever way you swing, good luck!
Traders from Equity Sense will be writing on this blog on positions and other market-related things.