talld's  Instablog

Here is a graph that depicts the typical correlation of a few tickers, mostly ETFs, each compared against VXX.   Notice how they all move together in a sort of braided rope, including BNI.  (UUP is directly correlated instead of inversely correlated, so it is not in the braid.)  It seems a bit questionable as to just where BNI fell out of trading with the others.  I marked a point 1, as my first guess as to where it changed, and point 2 as to where it dramatically and obviously changed.  Perhaps it was Buffet buying it, but that seems unlikely as he would want to keep the price down.

So, according to my graph people may have known about the deal and traded on that knowledge, as soon as 10/15 but no later than 10/26 when the correlation plummets to near zero.  There were two investment banks involved, Evercore and Goldman Sachs.    

The period in question was also the lowest period there was for price.  If someone bought a few million shares,  they would have made many millions in return.


I believe the second chart where BNI is compared to another railroad makes it obvious that someone was heavily trading BNI (enough to pull it out of its trading range in these graphs, which would have required that significant price pressure was put on BNI) beginning on 10/23 and stopping the day the deal was announced.  

(There was also unusual activity near the first part of September which stopped on 9/14 .)