9:00am (EST)
We recently told you about two IPO’s (initial public offerings) that had decent debuts, but we have mixed feelings on, CBOE Holdings (CBOE, $30.86, up $0.55) and Tesla Motors (TSLA, $19.20, down $2.76).
CBOE Holdings went public in mid-June and closed at $32.49 on its first day of trading after touching a high of $33.75. Shares have held $30 during the current market turmoil and are building a nice base. The high was $34.18 on June 24, and this company has a solid business.
As far as options, we can now add the stock to our Watch List because there is a market. Usually, it takes a few weeks for options to trade on IPO’s and we are excited to add CBOE Holdings. This relatively new issue is set to explode, but we aren’t sure on direction, yet. There is a chance to play some call or put options based on this little nugget of news we mentioned in our initial write-up on the company:
From June 15, 2010:
“Although CBOE is a new issue, be careful of buying this one as there is already litigation risk ahead. In early July, a court will decide if CBOE can continue licensing some of its higher margin products that they have exclusive rights to and the SEC (Securities and Exchange Commission) is thinking of placing fee caps on them.” (END)
This is an event that will have a significant impact on its share price, and it could be setting up for a GREAT straddle or strangle option trade. We take an early look at the long side of a trade this morning although we doubt we do anything until we get a better feel for the stock.
Tesla Motors is a different story. The company hasn’t made a profit, but the market went crazy when this one went public last Tuesday, or one week ago. Shares were supposed to be offered in the $14-$16 range and were bumped up to $17 before their debut.
The next day, on June 30 in our 1pm update, shares were at $28 when we said:
“The stock doesn’t trade options, yet, but when it does you can almost bet we will be looking at put options. Don’t buy the hype.” (END)
Well, the options couldn’t come out fast enough, folks. What a bummer. As of last night, there were no options listed on Tesla Motors, but we have already missed the $9 drop. Perhaps this over-priced, super-hyped stock falls into the single-digits, and by no means are we saying Tesla is a bad company. One day, they could become profitable, but right now the shares aren’t worth what investors are paying for them.
As far as earnings for the week:
TUESDAY – Stanley (SXE, $37.42, up $0.03)
WEDNESDAY – Family Dollar Stores (FDO, $38.62, down $0.13), Kayne Anderson Energy Development (KED, $15.36, down $0.05), Six Flags Entertainment (SIX, $33.00, flat), and WD-40 (WDFC, $34.17, up $0.35)
THURSDAY – A. Schulman (SHLM, $18.45, down $0.10), Lawson Software (LWSN, $7.30, down $0.05), International Speedway (ISCA, $25.51, down $0.21), and Life Partners Holdings (LPHI, $20.26, down $0.19)
FRIDAY – Elan (ELN, $4.79, up $0.14), PriceSmart (PSMT, $23.57, down $0.03) and STR Holdings (STRI, $18.42, down $1.00)
As we head to press, the futures are pointing towards a decent opening. Dow futures are up 116 points to 9,712 while the S&P 500 futures are higher by 14 points to 1,028. The Nasdaq 100 futures are showing a 27 point pop and are at 1,748.
We have listed a number of possible “new” trades on our Watch List as we look to close a few of our current trades for profits. The trend is still lower, and it will be interesting to see if the gains hold at the open. Subscribers, check the Members Area for the updates.
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