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"Risk comes from not knowing what you're doing" Warren Buffett I look and sift the world for such misplaced bets. When I occasionally find one, I first exploit it for profit. Then, I write about it for anyone else interested in such ideas. Twitter: @unemon1 Scribd:... More
  • Interesting Call Options Activity At Sky-Mobi (NasdaqGM: MOBI) 2 comments
    Jun 7, 2013 9:11 AM | about stocks: MOBI

    Sky-Mobi Limited operates a mobile application store in China. The company works with handset companies to pre-install its Maopao mobile application store on handsets and with content developers to provide users with applications and content titles.

    Ownership Structure per FY2012 (Link):

    Call Options Accumulation at SKY-MOBI (green = calls / red = puts)

    Trading Activity in the JAN14 $2.5 Calls

    Open Interest on the 20th of May 2,013: 0

    Open Interest on the 6th of June 2013: 4,161

    Over the past two weeks 186 trades (4,385 Contracts) in this contract Occurred; 84.9462% of the trades (3,871 Contracts) was at ASK or Above.

    It follows that at least 3,759 Contracts of the 4,161 Open Interest represent a Long Position in the Option!

    ---> This Corresponds to about a right to buy 375,900 ADS at expiration for 2.5$ each. ---> About 3.85% of the Theoretical Free Float (5.00% if Institutional Ownership is excluded from the Theoretical Free Float)

    ---> Someone invested 662,928 USD (long) in Jan14 $2.5 Calls ... ... of a Company with a Market Cap of less the 105,000,000 USD!

    Trading Activity in the JAN14 $2.5 Calls

    Open Interest on the 10th of May 2013: 0

    Open Interest on the 6th of June 2013: 6,153

    My Data Provider had some Problems with the Trades occurred in this contract on the 14th May, 2013. The following Statistics are therefore not 100% accurate. But I believe them to represent a fair picture of what happened over the past 4 weeks.

    During the past 4 weeks 260+ trades (6,700+ Contracts) in this contract Occurred; 80% of the trades (5,360 Contracts) was at ASK or Above.

    It follows that least 5,086 Contracts of the 6,153 Open Interest represent a Long Position in the Option!

    ---> This Corresponds to a right to buy 508,600 ADS at expiration for 2.5$ each. ---> About 5.10% of the Theoretical Free Float (5.80% if Institutional Ownership is excluded from the Theoretical Free Float)

    ---> Someone invested about 559,460 USD long in Oct13 $2.5 Calls ... ... of a Company with a Market Cap of less the 105,000,000 USD!

    Over the Past 4 weeks, more than $1,222,388 has been invested in Options with a $2.5 Strike (at different expiration dates). If exercised, these Options will allow the buyers to gain Control of about 884,500 ADS of Sky-Moby, representing approximately 8.90% of the Theoretical Free Float (10.80% if Institutional Ownership is excluded from the Free Float). It equals about 2.75% of the Theoretical Total Outstanding Shares.

    Pretty big Speculation (even on WS) on a Company with a Market Capitalization slightly above 100,000,000 USD!!

    Sky-Mobi Key Statistics

    Disclosure: I am long MOBI.

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Comments (2)
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  • wirestripper
    , contributor
    Comments (126) | Send Message
     
    Posting a reply as a marker for later reading...

     

    Yeah....it's me....MAD
    7 Jun 2013, 09:08 PM Reply Like
  • UNEMON1
    , contributor
    Comments (227) | Send Message
     
    Author’s reply » Additional Info:

     

    2. A principal at Sequoia Capital China (Website) sits on MOBI’s BoD.
    Mr. Kui Zhou has been a director of our company since 2006. Mr. Zhou has been a principal of Sequoia Capital China since 2005 and a partner of Sequoia Capital China since May 2007. Mr. Zhou also serves on the board of directors of some Sequoia portfolio companies, including a director of Sky-Mobi Limited. Sequoia Capital has been in early Investor in the Company and its ownership stake currently amounts to about 12.75% of MOBI’s Capital.
    The Presence of Sequoia Capital (Website) as one of the major shareholders of the Company on the one hand, and the fact that one of the Investments Company’s principal sit on the BoD on the other, should mitigate the Moral Hazard problematic that characterizes the management many of the Chinese Companies Listed in China.
    Lately Sequoia Capital China has been pretty active on the Take-over / Acquisitions front.
    14 Jun 2013, 03:44 PM Reply Like
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