3Par Shares Fall Below H-P Bid After Dell Withdraws
September 02 2010 - 12:15PM
Dow Jones News
The meteoric rally in 3Par Inc.'s (PAR) stock finally looks to
be over.
Shares in 3Par rose 2.31% to $32.82% after Hewlett-Packard Co.
(HPQ) offered $33 per share for the data-storage company. H-P's
stock rose 0.31% to 39.33, while shares in Dell Inc. (DELL) rose
1.40% to $12.30 after the company said it would drop out of the
bidding.
The ceasefire between the tech titans ends quite a run for 3Par,
whose shares traded for less than $10 before Dell's initial offer
of $18 on Aug. 16. They have more than tripled over the course of
the bidding.
3Par shares rose as high as $33.84 Thursday morning as a few
bullish investors anticipated, however briefly, that Dell might
fire back.
In the options market, a number of traders were unwinding out of
their 3Par positions Thursday, some to bank profits and others to
move on from bets that didn't play out as hoped.
The big profits in options mostly accrued to those who piled in
early or midway through the bidding.
For instance, traders who picked up $25 and $27.50 calls last
Thursday, when the stock closed at $26.03, have had plenty of
opportunity to profit. Some traders paid just 30 cents for the
$27.50 contracts, meaning any rise in the stock above $27.80--it
now fetches nearly $33--turns to profits.
But many were too late to the party or their bids shot too high.
Notably, bullish investors who piled into $35 3Par calls last
Friday don't have much to show for their bets. The $35 contracts
stand little chance of making profits unless a further bidding war,
or expectations for such a war, somehow re-emerge.
-By Chris Dieterich, Dow Jones Newswires; 212-416-2611;
christopher.dieterich@dowjones.com
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