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Dell's Disaster Could Generate Income for Traders ...READ MORE
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Dell's Disaster Could Generate Income for Traders
In a complex deal, Dell is creating a new class of stock designed to track the company's business. Billionaire Michael Dell led the deal with a sense of optimism, seemingly convinced that individual investors would want to invest alongside him.
But, after some shareholder actions, the implied price of Dell common shares is around $42, according to an analyst quoted in Barron's. That price is just over half the roughly $80 a share value that Dell assumed in the tracker transaction.
This could be less than expected for the company and the investment bankers involved in the deal. But it is the market's judgement and it is not usually in an investor's best interest to argue with the market's judgement. Investors, can however, benefit from that judgement.
We explore a strategy that is specifically designed to limit risk in precise terms in our latest article and share with you how useful a strategy like this can be when the market delivers a surprise as it did in this case. The risks to the company may be high but individuals can limit their personal exposure to the market as we explain.
All of the details of the strategy along with a specific trade that uses real market data are in our latest free educational article that is available right here.
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