Ackman is no dummy I will admit but can anyone tell me what he sees in Borders (BGP)?
In an SEC filing late Tuesday Ackman’s Pershing Square followed last week’s total return swap transaction in Borders shares with another.
The Details:
. Pershing Square International, Ltd. (“PSIL”), entered into a cash-settled total return swap with a broker-dealer counterparty for a commission equal to $0.03 per notional share subject to such swap. The swap was entered into on January 8, 2008 and expires on August 5, 2009. Under the terms of the swap (i) PSIL is obligated to pay to the counterparty any negative price performance under $9.7239 for each of the 1,770,100 notional BGP common shares subject to the swap (the “Swap Reference Shares”), plus interest, and (ii) the counterparty is obligated to pay to PSIL any positive price performance over $9.7239 for each of the Swap Reference Shares, plus any dividends paid during the life of the swap.
I just don’t get it. Ideas anyone?
Disclosure: None
3 replies on “Ackman Enters Into Another Total Return Swap in Borders”
When discussing his position in bond insurers, Marty Whitman (Third Avenue) said that Ackman is basically a shill…
Borders is very difficult to understand – the best hypothesis I’ve heard is that (and this is a stretch) fears of Chinese-made, lead-containing toys will cause more people to give books as Christmas gifts.
Um hm.
james,
i heard that too…but whatever ackman is, he isn’t stupid and to but 10% for that reason would be…
there must be something else, it is driving me crazy
Check out the Value Investor Club write-up:
http://valueinvesting.com/value2/VIC/Guests/ViewThread.aspx?delay=45&id=3090&more=dtrue