General Electric (GE) and Microsoft (MSFT) have recently held internal discussions about buying the Dow Jones Company (DJ) and combining it with some parts of NBC/Universal. However, the media reports state the two entities have not reached a point where they are ready to submit a bid.
An audio podcast of this article is available at: poweropt.com/podcasts/2007_06_11_DOW_MSFT.mp3
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A New York Times report stated the economics of the deal do not look as attractive as the companies would like. The two companies are concerned at Rupert Murdoch’s plan to start a competing financial news television channel. The channel would attempt to carve out some of the market share currently held by GE’s CNBC.
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The Wall Street Journal has reported the family who controls ownership of the Dow Jones Company, the Bancrofts, have been looking for alternative suitors in the deal, but have so far been unsuccessful. Media reports have quoted an NBC spokesman as having said, “These were simply exploratory conversations that ended more than a week ago.” The blog reported last week on this deal in the article, “The Rupert Murdoch and Dow Jones Saga with Bonus Covered Call Suggestions on Index ETFs”.
Today, we will look at Dow Jones and Company, NewsCorp, GE, and Microsoft as we revisit the deal. As always, this exercise is intended as an illustration of how you might identify option trades base on whether you believe a stock will rise or fall.
In this blog, we primarily focus on news events, which may cause a stock to rise. Many other techniques like technical analysis, value investing, and trend analysis will yield a list of stocks an investor might want to trade. Using a covered call investing strategy or other option investing technique can often yield higher profits than just buying the stock outright. There are lots of articles to help you better understand option investing and how it can work for you on the main page of the PowerOptions website. These articles are informative and best of all they’re free.
|PowerOptions covered call New Corp|
|NWS||$23.93||NWSGE||07 JUL $22.50||$1.70||7.10%||1.20%||1.20%|
|DJ||$60.14||DJGL||07 JUL $60.00||$2.25||3.70%||3.60%||3.60%|
|MSFT||$30.17||MSQGK||07 JUL $30.00||$0.93||3.10%||2.60%||2.60%|
|GE||$37.53||GEGS||07 JUL $37.50||$0.74||2.00%||1.90%||1.90%|
NWS – The News Corp trade involves the July $22.50 call option and offers 7.1% downside protection and 1.2% potential profit if the stock is above the $22.50 strike price at the end of the option period.
Competitors for NWS include: Time Warner Inc. (TWX), Walt Disney Co. (DIS), and Bertelsmann AG (private).
DJ – The Dow Jones trade involves the July $60 call option and offers 3.7% downside protection and 3.6% potential profit if the stock is above the $60 strike price at the end of the option period.
Competitors for DJ include: Reuters Group Plc (RTRSY), Bloomberg L.P. (private), Financial Times Group (private), Gannett Co. Inc (GCI), New York Times Co. Class A (NYT), and Tribune Co. (TRB).
MSFT – The Microsoft trade involves the July $30.00 call option and offers 3.1% downside protection and 2.6% potential profit if the stock is above the $30 strike price at the end of the option period.
Competitors for MSFT include: Google Inc. (GOOG), International Business Machines Corp. (IBM), Oracle Corp. (ORCL), Apple Computer Inc. (AAPL), Adobe Systems Inc. (ADBE), Altiris Inc. (ATRS), Borland Software Corp. (BORL), Convera Corp. (CNVR), Citrix Systems Inc. (CTXS), DivX Inc. (DIVX), Earthlink Inc. (ELNK), Epicor Software Corp. (EPIC), Immersion Corp. (IMMR), Logitech Intl. SA (LOGI), Lawson Software Inc. (LWSN), Marchex Inc. (MCHX), McAffee Inc. (MFE), Macrovision Corp. (MVSN), Novell Inc. (NOVL), Openwave Systems Inc. (OPWV), Progress Software Corp. (PRGS), Research In Motion Ltd. (RIMM), RealNetworks Inc. (RNWK), SAP AG (SAP), Smith Micro Software Inc. (SMSI), Stellent Inc. (STEL), Sun Microsystems Inc. (SUNW), Sybase Inc. (SY), Symantec Corp. (SYMC), TiVo Inc. (TIVO), United Online Inc. (UNTD), WebEx Communications Inc. (WEBX), Wind River Systems Inc. (WIND), and Zixit Corp. (ZIXI).
GE – The GE trade involves the July $37.50 call option and offers 2.0% downside protection and 1.9% potential profit if the stock is above the $37.50 strike price at the end of the option period.
Competitors for GE include: Citigroup Inc. (C), Koninklijke Philips Electronics NV (PHG), Siemens AG (SI), ABB Ltd. (ABB), Ametek Inc. (AME), AO Smith Corp. (AOS), Cooper Industries Inc. (CBE), Color Kinetics Inc. (CLRK), Emerson Electric Co. (EMR), Honeywell Inc. (HON), Itron Inc. (ITRI), Illinois Tool Works Inc. (ITW), Textron Inc. (TXT), and United Techs. Corp. (UTX).
For more information about how to identify and research great option trades, visit the PowerOptions website. There you will find the data you need to make quick, clear, and informed decisions. You can trade knowing you have found the best investment. Also, PowerOptions will allow you, with a few quick clicks, to quickly and accurately compare trades. PowerOptions‘ premium customer support is second to none in the industry. They can be easily contacted when you need them at their toll-free number to answer customer questions. Call them now toll free at 877-992-7971.
PowerOptions‘ sister company PowerOptionsApplied provides expert stock option trading recommendations. PowerOptionsApplied specializes in covered calls, naked puts and iron condor stock options strategy recommendations. PowerOptionsApplied provides a 30-day risk free trial of its service.
[tags] New York Times, CNBC, Wall Street Journal, NBC, NewsCorp, Bertelsmann AG, Bloomberg L.P., Financial Times Group, AAPL, Apple Computer Inc., ABB, ABB Ltd., ADBE, Adobe Systems Inc., AME, Ametek Inc., AOS, AO Smith Corp., BORL, Borland Software Corp., C, Citigroup Inc., CBE, Cooper Industries Inc., CLRK, Color Kinetics Inc., CNVR, Convera Corp., CTXS, Citrix Systems Inc., DIS, Disney (The Walt) Co., DIVX, DivX Inc., DJ, Dow Jones & Co. Inc., ELNK, Earthlink Inc., EMR, Emerson Electric Co., EPIC, Epicor Software Corp., GCI, Gannett Co. Inc, GE, General Electric Co., GOOG, Google Inc., HON, Honeywell Inc., IBM, Intl. Business Machines, IMMR, Immersion Corp., ITRI, Itron Inc., ITW, Illinois Tool Works Inc., LOGI, Logitech Intl. SA, LWSN, Lawson Software Inc., MCHX, Marchex Inc., MFE, McAffee Inc., MSFT, Microsoft Corp., MVSN, Macrovision Corp., NOVL, Novell Inc., NYT, New York Times Co. Class A, OPWV, Openwave Systems Inc., ORCL, Oracle Corp., PHG, Koninklijke Philips Electronics NV, PRGS, Progress Software Corp., RIMM, Research In Motion Ltd., RNWK, RealNetworks Inc., RTRSY, Reuters Group PLC, SAP, SAP AG, SI, Siemens AG, SMSI, Smith Micro Software Inc., SUNW, Sun Microsystems Inc., SY, Sybase Inc., SYMC, Symantec Corp., TIVO, TiVo Inc., TRB, Tribune Co., TWX, Time Warner Inc., TXT, Textron Inc., UNTD, United Online Inc., UTX, United Techs. Corp., WIND, Wind River Systems Inc., ZIXI, Zixit Corp., covered call investing, covered call investment strategy, investment strategy, iron condor, option investing, poweroptions, stock option trading, stock options [/tags]