Unusual Options Activity In Xerox

in SteemLeo4 years ago

Xerox Holdings Corporation designs, develops, and sells document management systems and solutions worldwide. Xerox has always made most of its money by building and selling large, fast, reliable copiers and printers, but now they want in on the service side.

HP Inc. provides personal computing and other access devices, imaging and printing products, and related technologies, solutions, and services in the United States and internationally. HP's Printing segment produces more than twice as much pre-tax income for the company and bulk of income is coming from consumables such as ink and toners.

HP Inc. provides personal computing and other access devices, imaging and printing products, and related technologies, solutions, and services in the United States and internationally.

However, we live in a digital world. People and companies are printing less and less. Companies are uploading documents to the Cloud.

Newspaper companies are moving from printing newspapers to digital subscriptions. People are uploading family photos to Facebook instead of printing them out for the photo album. Quite frankly, HP can’t compete when it comes to the digital world because it’s not their core competency.

So in a last minute stance for survival, three months ago Xerox announced a bid to buy HP for $22 a share, consisting of $17 a share in cash and 0.137 Xerox share for each HP share in a deal worth $33 billion.

Xerox thinks a combined company would generate better returns. Xerox also has identified $2 billion in savings...in the form of a head count reduction. But HP rejected the offer.

Xerox Holdings Corp is preparing to nominate as many as 11 directors to HP Inc's board, the Wall Street Journal reported on Tuesday, as the company seeks to push its $33.5 billion takeover offer for the personal computer maker.

The U.S.-based printer maker bought a small stake in HP in recent weeks, the newspaper reported, citing sources.

The stake would give Xerox the right to nominate directors for elections to be held at the HP's annual meeting this summer, the report said, adding that the deadline to nominate directors is Friday, and Xerox could still decide to not follow through with the nominations.

Source

Today, I notice unusual options activity in Xerox. The Smart Money bought over 10,000 of the April call options with a strike price at $45.

What was interesting about this activity was one transaction for 10,000 contracts.

What's even more interesting is the one transaction represents 1 MM shares, but the avg. volume of shares traded is 2.3 MM shares. I will be keep this one on my radar as price is pull back from monthly supply. But supply might be a lie in a couple of months.

This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.

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