GRMN Split Reminder

2 for 1 Stock Split Takes Effect Friday

By Bryan Bottarelli
Thursday, December 14, 2006 11:05 AM EST
Thu, 14 Dec 2006 16:05:00 GMT

Dear Bottarelli Research Member,

I wanted to send you this Thursday evening alert just so that nobody gets alarmed by tomorrow’s activity in shares of Garmin (GRMN – NASDAQ).

As you know, one of the bullish catalysts that I look for is newly announced stock splits. This was the trigger that got me closely following GRMN in the first place — and tomorrow Garmin is scheduled to split its shares 2:1. Now don’t let this alarm you — especially if you pull up shares of GRMN tomorrow and your ticker shows then down 50% on the day. This is not the case.

GRMN

You see, when a stock splits, you get assigned two options for every one option that you had previously owned. For example, if you own 5 of the Garmin January 55 Calls (GQR AK), you’ll now get assigned 10 calls with a strike price of 27.5. It’s just like breaking a $20 bill by receiving two $10 bills — it’s all the same result in the end.

In this case, I would estimate that instead of one call worth $1.80, you’ll now own two calls worth around $0.90. At any rate, it may take a day or two before everything gets sorted out on the exchange, so let’s avoid any confusion and simply canceling any sell orders (stop loss or otherwise) on this position — just for tomorrow. Let’s see how the split pricing comes out and we’ll re-evaluate on Monday. Until then…

Lock and load

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

© 2012 CSR Group, LLC. All rights reserved. Published in USA.

Information, opinion, research, and commentary contained herein is obtained from sources believed to be reliable; their reliability, however, cannot be guaranteed. The maxim of Caveat Emptor applies — let the buyer beware. Bottarelli Research does not provide individual investment advice, act as an investment advisor, or individually advocate the purchase or sale of any security or investment.

Investments recommended in this service should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Bottarelli Research reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscriber’s initials will be used unless express written permission has been granted to the contrary.

CSR Group, LLC expressly forbids its writers from having a financial interest in any security recommended to readers. Furthermore, all employees and agents of CSR Group, LLC and its affiliate companies must wait 24 hours before following a published recommendation.

Bottarelli Research alerts contain time-sensitive information, and are published and distributed to members with urgency. Because of this, not all published materials can be adequately proofread, and an occasional spelling or grammar error may exist.


Other Options Alerts From December 2006