Tuesday, March 31, 2009

Trades - March 31st, 2009

Today I bought April 100 puts in Goldman Sachs at 4.40.

I bought extra SRS at 54.04. Remember I let some out at 59.86 yesterday.

And I have a new one here. I bought September 10 puts in American Campus Communities, Inc. - ticker ACC - for 1.20 apiece. I believe it's some REIT that traffics in student housing. A well-known blogger/trader is touting it as a potential GGP.

Here's a refresher on strip-mall operator GGP:

This particular blogger had a good record last year - to put it mildly. I'd reveal his name but this pick of his is for *paying subscribers*. Me? No, I don't pay for this stuff. I inferred the ticker from data on his blog. If you really need to know who's beared up on this stock, email me on the side.

The stock is 14% shorted according to Yahoo; and it has only $28 million in cash versus $1.28 billion in debt. So it looks like the word is out....and certainly puts are priced high enough to reflect that. If my account and/or the stock firms up I may sell calls against the puts. I may turn my position into a *risk reversal* or an outright *synthetic short*. My first impression is that this company is not a *GGP*, not in the next six months anyway. Most certainly, a dividend cut/elimination is forthcoming. I'll be doing more research on this one - when I get a chance.

1 comment:

Richard said...

I think this is the short of the year and I believe they will have to cut their dividend to .26/share in order to stay in compliance with their debt covenants.

I've done some analysis on my blog: