By: Tom Gentile
on April 4th, 2022
Take a look at the share price of Twitter, Inc. (NASDAQ: TWTR) today.
It is up over 25% thanks to the decision of Elon Musk, CEO of Tesla, to purchase 73.5 million shares of TWTR stock.
That equates to a 9.2% ‘passive’ stake that he is taking in the social media company. As for the transaction cost? That equates to 2.9 Billion… with a B, (based on last Friday’s closing price.
The Term Passive Stake
The purchase is one that is done by his 13G filing. That form / type of filing is done when the acquirer of stock isn’t interested in pursuing an ‘activist agenda.’
An acquisition that shows an acquirer wants to take an activist position is one where they file a 13D form.
NASDAQ Outperforms on the Day
At the time of this writing the NASDAQ is up 235-points or 1.65%.
The Dow and S&P are up today, but not as much on a percentage basis as the NAZ. They are all at their highs of the day and we will see how things finish, but NASDAQ in large part of this deal is the shining start of the three today.
Options Idea on Elon Musk’s Purchase of 9.2% of TWTR
My online tools (www.tomsoptiontools.com) and my tools on my app Toms Option Tools have Twitter options showing up on multiple Options Ranker Scans.
One other list result showing a TWTR options is the Expensive IV List:
Below is a candlestick chart with the 7-149-day ATM Implied Volatility overlayed on it.
This speaks to that option (and likely other TWTR options) showing an elevated IV due to this influx of activity on them.
To execute a buying strategy like going Long Calls would be risky right now.
I’d feel better waiting for the IV to settle down before I look into going that route.
App: Toms Option Tools
Market Insight articles may show images of lists of stocks meeting a variety of options parameters like Unusual Call and or Put activity or Expensive IV found on my app Toms Option Tools.
Other times I will have other charts may work to amplify my educational points.
Those options data lists, however, can be found on my app Tom’s Option Tools. Use your device to search up and download this app and get free access to the Morning Reports section of the app.
Other parts of the app are available at a premium subscription rate, but the Morning Reports Lists are yours free.