Facebook Bears Garner 500% Profit From Structured Product Bets
August 6th, 2012Via: Bloomberg:
Facebook Inc. (FB)’s 45 percent drop since its initial public offering generated returns of more than 500 percent for European investors that bought structured products benefiting from the stock’s decline.
A put warrant, a security for speculating on the future direction of a company’s share price, which predicted Facebook would be at $22 by March, cost 6 euro cents ($0.07) to buy in the week after Facebook went public with an initial price of $38. Today, with Facebook trading at $21.10, the warrant is worth 37 euro cents, according to data compiled by Bloomberg.
