Investing

Unusual Options Activity in Maxar Technologies (MAXR) Ahead of $6.4B Buyout 

On Friday morning, it was announced that Advent International would acquire Maxar Technologies (US:MAXR) for $6.4 billion in an all-cash deal. Per the agreement, Advent will pay $53 a share in the acquisition and the deal is expected to close in mid-2023.

At the close of trading, Maxar stock finished the session at $51.93, higher by 124.8%.

According to the company, “[The] transaction will support Maxar to accelerate investment in and development of the Company’s next-generation satellite technologies and data insights for its customers.”

However, that’s not the interesting part. Instead, what is interesting is the unusual options activity that was picked up just one day before the acquisition was announced.

In options trading, big traders can’t really cover their tracks. When someone takes a large outright position, it shows up as unusual options activity. And one trader really didn’t do a good job at covering their tracks.

Shortly before 2:30 pm ET and with shares trading at $22.80, someone bought the February $25 calls, paying just over $205,000 in premium.

Then, with just four minutes until the close of trading and with shares trading at $22.9, the same calls lit up again.

That’s as, presumably the same trader, scooped up another $552,000 worth of the same calls. The trade was in two separate transactions, with one valued at $256,000 and the other at $296,000, respectively.

In total, someone paid $757,000 in premium for these calls. Based on Maxar stock’s closing price of $51.93, these calls are in-the-money by almost $27 and appreciated by more than 1,500%. That’s a massive one-day gain that will likely raise a few red flags with the Securities and Exchange Commission (SEC).

This article originally appeared on Fintel

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