BLS and "T" options

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Mar 6, 2006 1:21 pm

My client has 6,600 BLS and 6,100 "T"; are there any creative option plays here?<IMG alt= src="http://forums.registeredrep.com/smileys/smiley25.gif">

Mar 6, 2006 4:23 pm

This is a good chance to learn the lesson, "Buy the rumor, sell the news."


There is probably nothing worth doing that is available in playing the merger unless you want to speculate that it won't happen. But that doesn't seem like a good bet.


Anytime these mergers occur there is a bit of a play by buying one and shorting the other waiting for the exchange of stock to occur--but after the deal has been announced all you're going to gain is the modest spread which is affected by cost of money issues coupled with a heavy dose of guessing how long it will take to actually come around.


This one seems to be a done deal with a known time frame.  You could contact your options department to see what they think, but off the top of my head, without putting much thought into in (since I don't have the cusomter) I'm inclined to say nothing very smart can be done.


But life is learning, perhaps one of the other boys or girls will have an idea for you--and me too.

Mar 6, 2006 7:53 pm

Forget the options and focus on the real opportunity here.


If the deal does indeed fly, there will be lay-offs in the thousands. Can you say 401(k) rollovers? 


Get to know the people at your AT&T / Bellsouth offices real good. Even better, get to know the HR people, if they're in your area. If you have any client retirees from either company, have them get you introductions.


This is a good oppportunity to capture potential "assets on the move".


Ya betta believe I'm pursuing it!

Mar 6, 2006 8:44 pm

"Even better, get to know the HR people"


"Mrs HR/Benefits manager, I work with several clients who may be affected by the proposed layoffs. Thety have expressed some concerns regarding their retirement benefits and options. I am in the process of educating myself on the intricacies of their programs, and would truly appreciate gaining some insight. I understand you may be busy, but would I be able to drop by for 20 minutes in the next 2 weeks and ask you a few questions re: the 401k/DB/stock purchase,etc,etc,etc plan? My clients, who are your current employees, would be grateful."


Thats a script that, while not verbatim, has actually worked in the past for me. By positioning yourself as someone who is seeking to gain knowledge to better educate yourself on their options, its less of a 'hard sell' for a meeting.


Most FA's would be calling to schedule employee seminars/workshops on rollovers, etc, etc. May be a way to differentiate yourself. Then, once you get the meeting you can feel their temperature on how open they owuld be to allowing you more access....

Mar 6, 2006 11:14 pm

Options?  What options?  It's not like you go public with a $67 billion merger if you expect to run into a whole bunch of problems along the way.  One misstep, and all of sudden you like a total jackass in the eyes of your client.  Use this as an opportunity to lay out the big picture to your client.  What does this tell you about the industry as a whole at this time?  Who are the losers if the synergies truly come to fruition?  Lucent?  Reback?  Who are the winners?  Just how aggressively will Verizon pursue its wireless namesake that it has virtually no control over.  Would Vodafone sell?  For what price?  How much of an orphan is Qwest?  Pick your spots on the long and short side, and stay committed to your ideas.  They might not all be right, but you will be the voice of reason (and hopefully profit) for your clients. 

Mar 7, 2006 7:40 pm

blarmston:

Thats a script that, while not verbatim, has actually worked in the past for me. By positioning yourself as someone who is seeking to gain knowledge to better educate yourself on their options, its less of a 'hard sell' for a meeting.


Most FA's would be calling to schedule employee seminars/workshops on rollovers, etc, etc. May be a way to differentiate yourself. Then, once you get the meeting you can feel their temperature on how open they owuld be to allowing you more access....


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As always, blarm, good info.