Skip to comments.Soros Fund Management Reports Holding 100,000 Heinz Puts (Connections...)
Posted on 08/21/2006 8:27:47 AM PDT by markomalley
WASHINGTON -(Dow Jones)- Soros Fund Management LLC, an investment vehicle for billionaire investor George Soros, on Monday disclosed a holding of 100,000 puts on shares of H.J. Heinz Co. (HNZ) at June 30.
In a report of second-quarter holdings, Soros Fund Management valued the Heinz puts at $4.1 million. Puts grant a right to sell shares at a specified price. Heinz has been in an ongoing proxy battle with investor Nelson Peltz, who is seeking to place five members on the company's 12-member board. Heinz shares closed on Monday at $41.23, almost identical to their close of 41.22 on June 30.
The left always eats its dead.
excuse me -- 100,000 puts.
Perhaps he is also long 1 MM (or some other number of) the common, in which case the two positions form a hedge or a partial hedge. Why does it matter?
I believe it's an implied threat, probably against the folks fighting against his ally Therayza. If the proxy fight goes against her Soros will use his standard tactic of outright manipulation of the market to cause damage to the value of Heinz stock, a move that he'll make money from. He's advertising his intent.
That's my cynical view of Soros talking, not any insight on the market or trading.
Inspite of his politics, Soros is no dummy in this arena.
because if he's not hedged, he's got a position, Soros.
Isn't each put a contract for one hundred shares? That would be ten million shares. I can't see Soros being interested in one hundred thousand shares of anything.
I think your assessment is accurate.
Why would it? Theresa Heinz has no say in the day to day operation of the company. Also as far a stockholders I don't think she even ranks.
I don't see a story here other than someone buying stock.
Correct, each quanity of 1, whether they be puts or calls, equal 100.
Well Also that it may be a good time to buy Heinz stock:
Of course I'm not a stock analyst, so dthis is not advice.
I know. I saw : Puts, Peltz, Putz. I decided right there I was done with that article.
Then Soros has Heinz puts worth over four hundred million dollars?
More likely they, Dow Jones, were phrasing the story so that non-traders would understand. But I guess anything is possible when it comes to Soros.
A put option (sometimes simply called a "put") is a financial contract between two parties, the buyer and the seller of the option. The put allows the buyer the right but not the obligation to sell a commodity or financial instrument (the underlying instrument) to the seller of the option at a certain time for a certain price (the strike price). The seller has the obligation to purchase at that strike price, if the buyer does choose to exercise the option.
Note that the seller (the writer) of the option is agreeing to buy the underlying instrument if the buyer of the option so decides. In exchange for having this option, the buyer pays the seller a fee (the premium).
I have bought puts for as low as $6.25 per contract (there are 100 units in a contract). So those 100,000 shares in question could have cost $625,000.00 or 6,250.00 depending on what they meant by 100,000.