27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
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Over the past few months Charter has been named as a potential acquisition target but there is one notable problem, Wells Fargo's Marci Ryvicker commented in a research report. Specifically, there are restrictions on Charter's debt structure, which consists of both secured and unsecured debt.
Charter's total incurrence test of 6.0x limits its incremental debt capacity at $30.8 billion, which implies the acquiring company would be dependent on a lot of equity to finance the deal, the analyst continued. Also, it would be "complicated and unlikely" for any suitor to simply refinance Charter's debt to remove the 6x incurrence test (see Ryviker's track record here).
Forget About Verizon And Sprint
Meanwhile, the regulatory environment is "uncertain," which makes a tie-up with Verizon Communications Inc. (NYSE:VZ) not impossible but unlikely for several reasons, Ryvicker added. First, the high-speed data part of the combined business would boast 29 million HSD customers, which is pretty close to the 34 million customers who would have been created through aWant Private Access to Benzinga Analyst?
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Second, Verizon's strategy "seems to be changing almost weekly" but for at least the time being seems to be comfortable operating as a standalone entity for now. Third, a deal for Charter may not even make financial sense for Verizon given its own investment grade status and its annual $9.4 billion dividend payment.
Finally, Charter has already made it clear it has no interest in being acquired by Sprint Corp (NYSE:S) and its parent company SoftBank, the analyst concluded. As such, Charter "has spoken" and there is no reason to do the math behind such a deal and this scenario is "highly unlikely."
Related Links:Look Beyond The Speculation: Sprint's Solid Performance Overshadowed By M&A ChatterFollow The Money: 5 Summer Blockbuster Media Deals ________Image Credit: By Dwight Burdette (Own work) [CC BY 3.0 (http://creativecommons.org/licenses/by/3.0)], via Wikimedia Commons
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.