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22/11/23

13:17

Post #: 71042945
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Originally posted by 618: ↑

Swaps are just one type of OTC derivatives commonly used by the market. There is nothing shady about it. There are so many types of swaps out there, including Equity Swaps and perhaps the most commonly-known to everyone (thanks to the GFC) is the Credit Default Swaps. Within Equity Swaps, there are also many different subtypes that will define how it is priced and duration of the swap term. Important to note that in a swap, the ownership transfer to Athos in this case in only valid for the term of swap agreement. In return, Athos will be paying MS some form of interest payment (probably linked to LIBOR). Swaps are not that different to other derivatives such as options, except options are registered and traded on exchanges while swaps are private OTC contracts between the two counterparties.

What Athos' motive is in this transaction can only be speculated. Whether it is for a company specific trade or part of a larger overall portfolio strategy is only known to them.

Either way, there is only 2 weeks left till the SOA is voted on. So this shorting STX/buying TPD will end soon enough regardless of whether the SOA is voted through or not

618

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Hey 618,
Agree with all that. That shady part, in my opinion, is that if you look at the transactions reported in Athos' substantial holding notice, the primary purpose was to occlude Athos' beneficial ownership (behind MS). I'm sure it's legal, but it's not in keeping with the spirit of the law, IMHO.

STX Price at posting: 38.5¢ Sentiment: Buy Disclosure: Held
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