Zayo...Potential Buyout Coming By Mid-March
Zayo Group Holdings, Inc. (ZAYO) through its subsidiaries, provides bandwidth infrastructure solutions for the communications industry in the U.S., Canada and Europe. Customers include wireless and wireline carriers, media and content companies and finance, healthcare and other large enterprises.
A high frequency trading firm recently selected Zayo Group Holdings, Inc. (ZAYO) for an ultra-low latency (ULL) solution in the the New York/New Jersey financial corridor which will allow them to execute it high frequency trading strategy, where having a microseconds edge makes the difference of racking up multi- millions of dollars in profits.
NOTE: that’s another topic for a later time.
Last week, the stock of Zayo jumped almost 10% after Bloomberg reported that talks were heating up between Google and CenturyLink to buy Zayo. Those buyout offers were reportedly in the low to mid $30 per share range. When news hit the wire, the Smart Money has been buying up all the call options they can in Feb and Mar, thinking the buyout will occur over the next 4-6 weeks.
You can see the Smart Money was bought over 15k February call options at the strike price expiring in two weeks.
Also, the Smart Money already has their positions in the March options as indicted by the open interest near the $30 strike price.
NOTE: Zayo also has earnings next week, so some of the positions could be betting on better than expected earnings
The two levels to watch in the coming weeks are the weekly supply zones at $30 and $32.
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.
Pretty interesting to read about this
Interesting as the space has slowed down in M&A given the recent consolidation in the carrier space. However, makes sense as the 5G build out will bring plenty of competition.
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