Aktiva Buys Yaco: A Case Study Of Market Manipulation With Options Harvard Case Solution & Analysis

IMD-1-0297 © 2010
Bris, Arturo

The bid price offered was $330 per share of Yaco. Both Yako and Aktiva were medium- size, publicly traded companies, running in the services sector. The announcement was made after Aktiva had purchased a 24.1 percent stake in the company in the open market. Furthermore, both before and after the announcement, Aktiva purchased call options representing an added 26.12 percent of the equity of Yaco.

The options had times to maturity fluctuating between 229 and 558 days, and with exercise costs ("strikes") ranging between $300 and $390. In three cases, the options were bull spreads (a combined position of an extended call and also a short call with different strikes). Learning objectives: Market Exploitation, Option Markets, Fair Price Statutes.

Subjects:: Options; Mergers and acquisition; Market manipulation Settings: Medium; 2008

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