Loading ...CS Take UNDER
Got this one wrong, as far as the speculative trade was concerned. Going to be a bust but knew they wouldn’t let them just go under. However, that still might happen as the CDS provision could cause the deal to unwind and if that plays out in the next few days the global financial system could implode. https://finance.yahoo.com/m/b12d6354-a937-36c1-b744-642b341227ef/ubs-to-buy-credit-suisse-for.html
Luongo says the FED is backstopping the rescue via the Swiss National Bank. They will not let CS go under is what he is saying .
That is why I speculated. I knew they would step in but the price is so low and CS is balking for more. They will probably get a higher price but this is almost like the Bear Stearns deal. JP Morgan stole it at $2 and after lawsuits and a dragged out battle later down the road I think they ended up paying $8. This is a lowball price but because of the derivatives etc. I am going to lose just a matter of how much. That is why it was a small speculative trade. They don’t always work out.
Interesting subplot. Saudi’s own almost 10% of CS at much higher prices. Either the Saudi’s come in with a counter offer and put the Saudi oil money behind it or they take a huge haircut on their position. I don’t expect them to throw good money after bad, but hey you never know?
Luongo view is that Saudi’s will not bid, and have walked away from their investment, given CS blocked/seized all Russian assets with the bank, as instructed by the EU.
When the metals start trading tonight they will tell you what to expect. If they are calm or even down a bit then something is being worked out to stabilize CS. If nothing gets announced by then, the metals could rocket and stocks tank. Pass the popcorn.
Thanks CM…Indeed
The Credit Suisse chart indicates huge price upside. I already mentioned this before. It will exceed 20 dollars per share guaranteed. There is no way its going to fail or be allowed to fail. On the contrary its going to get a lot more investor attention and come back from the brink. I have no idea why of course or what will be put in place to backstop it but certainly government guarantees will help. All I know is whats on the chart and the chart says to buy it for the long term.